Dokuz Eylül University Information Package / Courses Catalog

Description of Individual Course Units

Course Unit Code	Course Unit Title	Type Of Course	D	U	L	ECTS
ECO 4311	FINANCIAL ECONOMICS	ELECTIVE	3	0	0	6

Offered By

Economics

Level of Course Unit

First Cycle Programmes (Bachelor's Degree)

Course Coordinator

PROFESSOR SAADET KASMAN

Offered to

Economics

Course Objective

This course is intended to introduce advanced undergraduate students to the basic theoretical and empirical issues relating to: the role of financial markets in the economy; investment, financing and payout decisions of firms as well as saving and investment decisions of individuals. It also develops the main ideas in finance theory, including the CAPM, arbitrage pricing and option pricing within an economic framework.

Learning Outcomes of the Course Unit

1	Acquire basic knowledge about important theories of finance such as Efficient Market Hypothesis, CAPM and APT as well as the workings of different financial markets and institutions such as Stock markets, Bond markets, Derivative markets, Insurance companies, Mutual funds and Pension Funds,
2	To be able to demonstrate investment decisions of investors using tools from economic analysis
3	To establish an ability to relate financial markets to the rest of the economic system to be able to comprehend the reasons for financial crisis.

Mode of Delivery

Face -to- Face

Prerequisites and Co-requisites

ECO 3003 - MONEY AND BANKING

Recomended Optional Programme Components

None

Course Contents

Week	Subject	Description
1	The Investment Environment	1
2	Asset Classes and Financial Instruments	2
3	How Securities are traded	3
4	Learning about Return and Risk from the Historical Record	5
5	Risk Aversion and Capital Allocation to Risky Asset	6
6	Capital Asset Pricing Model	9
7	Arbitrage Pricing Theory and Multifactor Models of Risk and Return	10
8	Stock Market and Bond Market	Notes and Presentation
9	Banking Industry	Notes and Presentation
10	Insurance Industry	Notes and Presentation
11	Pension Funds	Notes and Presentation
12	Mutual Funds	Notes and Presentation

Recomended or Required Reading

1. Bodie, Kane and Markus , Investments (2003), Mcgraw-Hill.
2. Lecture Notes

Planned Learning Activities and Teaching Methods

1. Lecture
2. Discussions and Presentations

Assessment Methods

SORTING NUMBER	SHORT CODE	LONG CODE	FORMULA
1	MT	Midterm
2	PRS	Presentation
3	FN	Final
4	FCG	FINAL COURSE GRADE	MT * 0.35 + PRS * 0.30 + FN * 0.35
5	RST	RESIT
6	FCGR	FINAL COURSE GRADE (RESIT)	MT * 0.35 +PRS * 0.30 + RST * 0.35

Further Notes About Assessment Methods

1. Midterm exam
2. Final exam
3. Presentations

Assessment Criteria

1. The learner will clearly define basic concepts in financal economics such as CAPM, APT, Efficient market hypothesis.
2. The learner will demonstrate understanding of different financial institutions and instruments.
3. The learner will show the outcomes of different economic policies on financial institutions.
4. The learner will evaluate the investment decisions of investors who have different risk tolarance.
5. The learner will explain the reasons of financial crisis.

Language of Instruction

English

Course Policies and Rules

1. Attending at least 70 percent of lectures is mandatory.
2. Plagiarism of any type will result in disciplinary action.

Contact Details for the Lecturer(s)

To be announced.

Office Hours