Faculty
Marcel Marekwica

Course Coordinator
Bjarne Florentsen

The course is open to all bachelor students seeking not only a qualitative but also a quantitative understanding of key economic concepts. The course is especially recommended for students in the final year of their bachelor studies that intend to apply for a master program in “Finance and Accounting”, “Finance and Strategic Management” or “Applied Economics and Finance”.

The objective of the course “Quantitative methods in finance and economics” is to provide bachelor students with highly desirable quantitative skills required when pursuing a master’s degree. For all bachelor students seeking to apply for some such degree, it is therefore highly recommended to take this course.

Throughout the course, strong emphasis will be given to relate the theoretical concepts studies to applications in business management, economics and finance.

The key contents of the course are:

· Linear Algebra

· Calculus

· Optimization

Quantitative methods have become a very powerful tool in economics and finance that can help understanding economic phenomena. Fruitful economic applications include e.g. portfolio optimization, regression, modeling of uncertainties, interest rate models, elasticities, option pricing and many more.

At the end, many economic problems are optimization problems. Businesses might e.g. seek to maximize their profits; economists might e.g. seek to minimize unemployment. An important step to solving optimization problems is to know the right method to approach different types of optimization problems. Providing you with a “toolbox” containing several of these methods required both in business and master programs is one of the key objectives of the course. Furthermore, the course shall enable you to use the methods introduced in class on a computer using e.g. Excel.

The course will enable students to formalize and solve problems business managers and economists might be facing in their working lives. High emphasis will be given to relating theoretical concepts to real-world examples.

To attain the top grade, students are required to have a good understanding of quantitative methods and their applications. This includes

· Formalize verbally expressed problems in a mathematical way and identify ways to solve such problems

· Identify, classify and apply concepts suited for solving a given problem.

4 hour written final exam “open book”: Students are allows bringing their books, calculators and hand-written notes to the final exam. Computers, however, are not allowed during the final exam.

The main reference for the course will be:

Sydsæter, K. and P. Hammond (2008): Essential Mathematics for Economic Analysis, Perason Education / Prentice Hall, 3rd edition

This book was chosen as in contrast to many other books it does not only contain questions the students might want to deal with, but also provides them with sample solutions, which might e.g. be helpful when preparing for the final exam.