This course examines the economic principles that determine the allocation of resources through time in market economies. It uses supply and demand relationships to value capital assets (or projects more generally). There is a detailed treatment of the effects of time, risk and misspecification on capital asset prices. The impact of liquidity on our understanding of financial economics will also be discussed.
Learning Outcomes
Upon successful completion, students will have the knowledge and skills to:
- define the classical finance model that underpins modern finance;
- explain how securities are priced and affected by the institutional arrangements in securities markets,
- demonstrate an understanding of the role played by time, uncertainty, information and misspecification in evaluating financial instruments;
- analyse the role played by arbitrage in finance markets and its impact on security prices;
- demonstrate an in-depth understanding of how security prices are determined in the Consumption Capital Asset Pricing Model, and the role played by the assumptions in the model;
- identify the assumptions behind the the Hansen-Jagannathan bounds and the mean-variance frontier as basis for understanding the factors that determine the portfolio choice;
- demonstrate an understanding of the role of complete markets in financial markets;
- demonstrate an understanding of how market frictions can impact financial decisions and asset prices.
Other Information
Indicative Assessment
- Assessment will consist of a Final Exam, mid-semester exam(s), in-class quizzes and a project, or some combination thereof. See the Class Summary for details. (100) [LO 1,2,3,4,5,6,7,8]
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Workload
130 hours in total over the semester consisting of lectures, tutorials/workshops and private study time.
Inherent Requirements
Not applicable
Requisite and Incompatibility
Prescribed Texts
See Class Summary
Fees
Tuition fees are for the academic year indicated at the top of the page.
Commonwealth Support (CSP) Students
If you have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). More information about your student contribution amount for each course at Fees.
- Student Contribution Band:
- 34
- Unit value:
- 6 units
If you are a domestic graduate coursework student with a Domestic Tuition Fee (DTF) place or international student you will be required to pay course tuition fees (see below). Course tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.
Where there is a unit range displayed for this course, not all unit options below may be available.
| Units | EFTSL |
|---|---|
| 6.00 | 0.12500 |
Course fees
- Domestic fee paying students
| Year | Fee | Description |
|---|---|---|
| 2024 | $4680 | Standard Rate |
| 2024 | $3720 |
Grandfathered Rate*
*continuing students in nominated programs only. See fee website |
- International fee paying students
| Year | Fee |
|---|---|
| 2024 | $6000 |
Offerings, Dates and Class Summary Links
ANU utilises MyTimetable to enable students to view the timetable for their enrolled courses, browse, then self-allocate to small teaching activities / tutorials so they can better plan their time. Find out more on the Timetable webpage.
Class summaries, if available, can be accessed by clicking on the View link for the relevant class number.
Second Semester
| Class number | Class start date | Last day to enrol | Census date | Class end date | Mode Of Delivery | Class Summary |
|---|---|---|---|---|---|---|
| 7997 | 22 Jul 2024 | 29 Jul 2024 | 31 Aug 2024 | 25 Oct 2024 | In Person | View |