EC349: Financial Economics

Module code: EC349

Module provider: Economics; School of Philosophy, Politics and Economics

Credits: 20

Level: 6

When you’ll be taught: Semester 1

Module convenor: Dr Mark Guzman , email: m.g.guzman@reading.ac.uk

Pre-requisite module(s):

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: NA

Academic year: 2025/6

Available to visiting students: Yes

Talis reading list: Yes

Last updated: 3 April 2025

Overview

Module aims and purpose

This module aims to provide a rigorous coverage of the economic reasoning underpinning much of modern finance, including portfolio theory and asset pricing. It will apply neoclassical financial analysis both as intellectual contributions on their own and as a set of guidelines to financial decision making in the more complex world of uncertainty and market imperfections. It will discuss the role of financial intermediation in facilitating investment, like via mutual funds, as well as developments in financial products and services.

Module learning outcomes

By the end of the module, it is expected that students will be able to:

1. Explain how individuals and firms make financial decisions under certainty
2. Discuss the models informing investment decisions relating to forming investment portfolios and pricing risky assets
3. Discuss the benefits and risks of non-traditional securities, including derivatives
4. Appreciate the role of financial intermediaries facing capital market imperfections.

Module content

Organisation of a modern financial system and the role of financial intermediaries; Innovations in financial products and services; Financial decision making under certainty and in a perfect capital market; Decision making under risk; Selection and pricing of risky assets; Asset pricing models.

Structure

Teaching and learning methods

A combination of lectures and seminars for discussions of assigned topics and problems, and assessed coursework.

Study hours

At least 20 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.