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CM_AE57 - Capital Market Theory* - CLOSED FOR FURTHER ENROLLMENT

Faculty
Johannes Mouritsen
Course Coordinator
Johannes Mouritsen
Prerequisite/progression of the course
  • Open for exchange students.
  • Closed for students under Open University (Åben Uddannelse).
  • As a first year course, the exam in this course cannot be taken as a term paper.
Course content, structure and teaching
This course provides the student with the fundamental theories of pricing of financial instruments.
This course in financial economics will focus on theories of pricing in capital markets. The main issues are: Choice under uncertainty; Selection of an optimal portfolio for the investor given preferences for return and aversion to risk; Pricing of equity; Pricing of bonds; Pricing of derivative instruments i.e. options, futures, and swaps. Examples of use of the instruments in portfolio management and discussions of the efficiency of the capital market are also part of the course.
Learning Objectives
The purpose of this course is to provide the student with fundamental theories of pricing of financial instruments. At the end of the course, students should :
  • be familiar with theories and models of portfolio selection, pricing of shares, bonds, derivatives, assets allocation over time as well as concepts of and tests of capital market efficiency
  • be able to apply the theories in solving portfolio problems, pricing issues and, in evaluation of portfolio performance in practice..
Teaching methods
Lectures and discussions in class, exercises
Course literature
  • Elton/Gruber/Brown/Goetzmann (2007), Modern Portfolio Theory and Investment Analysis, 7th Edition.

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