Financial Theory and Models (F)

Course content

The course introduces tools for the analysis of both discrete and continuous time asset pricing models.  Methods to price derivaties under a no-arbitrage condition are studied and applied. Various interest rate models are introduced. Models for risky debt and optimal capital structure are studied. The appropriate mathematical tools are introduced and explained in the course.

Education

MSc programme in Economics – elective course

 

Bacheloruddannelsen i økonomi – valgfag på 3. år

The Danish BSc programme in Economics - elective at the 3rd year

 

The course is part of the Financial line at the MSc programme in Economics,  symbolized by ‘F’.

 

The course is open to:

  • Exchange and Guest students from abroad
  • Credit students from Danish Universities
  • Open University students
Learning outcome

After completing the course the student is expected to be able to:

 

Knowledge:

  • Identify, describe and discuss core problems in the rigorous modeling of basic financial notions.
  • Account for the main technical tools used in rigorous modeling of discrete and continuous time economics.
  • Account for the main concepts of financial economics.
  • Assess and discuss both benefits and deficiencies of the applied methods and models under scrutiny.

 

Skills:

  • Correctly select and apply core models to analyze problems in finance.
  • Master the analysis of a given problem in finance by selecting and correctly applying the pertinent tools.
  • Engage in academic discussions of financial economics and to assess both results and deficiencies of the applied models in a broader context of economics and society.

 

Competencies:

  • Apply the acquired skills to new areas of analysis in both financial economics as well as in broader fields of economics.
  • Master and modify the studied tools and methods in new situations.
  • Apply the acquired skills as stepping stones to more advanced models and topics in finance and economics.

Lectures supported by supplemental lectures and exercises

Text book: Tomas Björk. Arbitrage Theory in Continuous Time. Oxford Finance Series, 3rd Edition.

 

Supplementary teaching material and exercise lists provided by the teacher.

The student will benefit from having attended "Corporate Finance and Incentives" or similar from the study of Economics, University of Copenhagen.

The student will benefit from attending "Financial Decision Making" or similar from the study of Economics, University of Copenhagen at the same time as the course.

The student should have a sound knowledge of markets and prices from a similar course as "Microeconomics I" from the Bachelor of Economics, University of Copenhagen.

The student should have a basic knowledge of probability from a similar course as "Probability Theory and Statistics" from the Bachelor of Economics, University of Copenhagen.

For non-economic student it is recommended to have followed similar courses as "Business Economics", "Mathematics A" and "Mathematics B" or similar from the Bachelor of Economics, University of Copenhagen, before or at the same time as "Financial Theory and Models".

Schedule:
2 hours lectures once a week from week 36 to 50 (except week 42).
2 hours exercise classes once a week from week 36 to 50 (except week 42).

Schema:
The overall schema for the BA 3rd year and Master can be seen at KUnet:
MSc in Economics => "Courses and teaching" => "Planning and overview" => "Your timetable"
BA i Økonomi/KA i Økonomi => "Kurser og undervisning" => "Planlægning og overblik" => "Dit skema"

Timetable and venue:
To see the time and location of lectures please press the link under "Timetable"/​"Se skema" at the right side of this page. E means Autumn.

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku2223/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E22; [Name of course]””
-Select Report Type: “List – Weekdays”
-Select Period: “Efterår/Autumn”
Press: “ View Timetable”

Please be aware:
- The schedule of the lectures and exercise classes can change without the participants´ acceptance. If this occures, you can see the new schedule in your personal timetable at KUnet, in the app myUCPH and through the links in the right side of this course description and the link above.
- It is the students´s own responsibility continuously throughout the study to stay informed about their study, their teaching, their schedule, their exams etc. through the curriculum of the study programme, the study pages at KUnet, student messages, the course description, the Digital Exam portal, Absalon, the personal schema at KUnet and myUCPH app etc.

Oral
Collective
ECTS
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Type of assessment details
ITX-exam in the exam venues of the university.
The exam assignment is in English and must be answered in English.
Exam registration requirements

There are no requirements that the student has to fulfill during the course to be able to sit the exam.

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Aid
Written aids allowed

All written aids allowed at the written ITX-exam.

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Marking scale
7-point grading scale
Censorship form
No external censorship
for the written exam. The written ITX-exam may be chosen for external assessment by random sample.
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Exam period

 

Exam information:

The exact time and place will be available in Digital Exam from the middle of the semester. In special cases decided by the Department, the exam can change to another place, type, day and/or time than announced. 

 

More information about examination, rules, aids etc. at Master(UK), Master(DK) and Bachelor(DK).

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Re-exam

ITX-reexam. Same as the ordinary exam. 

 

Reexam info:

Exact type, day, time and place is available in Digital Exam in February. In special cases decided by the Department, the re-sit can change to another place, type, day and/or time than announced.

 

More info: Master(UK), Master(DK) and Bachelor.

Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.

 

In order to obtain the top grade "12", the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.

 

In order to obtain the passing grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of  the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 28
  • Class Instruction
  • 28
  • Preparation
  • 147
  • Exam
  • 3
  • English
  • 206

Kursusinformation

Language
English
Course number
AØKA08234U
ECTS
7,5 ECTS
Programme level
Full Degree Master
Bachelor
Duration

1 semester

Placement
Autumn
- Go to 'Signup' for information about registration and enrollment.
Price

Information about admission and tuition fee:  Master and Exchange Programme, credit students and guest students (Open University)

Schedulegroup
and venue:
- For teaching: Go to 'Remarks'.
- For exam and re-sits: Go to 'Exam'.
Studyboard
Department of Economics, Study Council
Contracting department
  • Department of Economics
Contracting faculty
  • Faculty of Social Sciences
Course Coordinator
  • Frank Hansen   (12-6c78677471346e6774796b74466b69757434717b346a71)
Teacher

See 'Course Coordinators'

Please read "Remarks" regarding the schedule of the teaching.

Saved on the 11-04-2024

Are you BA- or KA-student?

Are you bachelor- or kandidat-student, then find the course in the course catalog for students:

Courseinformation of students