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Asset Pricing (GRAE021)

Course Description

This course focuses on asset pricing and financial markets. The prerequisites for this course will have prepared you with an understanding of the theoretical foundations of the investment topics to be discussed. These same topics will be considered here from a more applied perspective.  Course discussions will cover the following topics: risk, diversification, interest rates, valuation theories, derivative securities (futures, forwards, and options), risk management, efficient markets, and portfolio management.

Course Objectives

At the end of this course, students should be able to:

  • Analyze and evaluate financial data. Recommend and justify decisions, including decisions arising from ambiguous or unfamiliar information, or arising from ambiguous or incomplete directions.
  • Illustrate the understanding of the relationship between tools and theories. In particular, demonstrate modern portfolio theory, characterize asset valuation models, demonstrate the CAPM, outline the Fama-French 3-Factor Model, and outline the Arbitrage Pricing Theory.
  • Develop an ability to suggest solutions in corporate finance. In particular, demonstrate fixed-income security analysis for the development and monitoring of fixed-income portfolios. Additionally, demonstrate equity security analysis for the development and monitoring of equity portfolios. Furthermore, characterize derivative securities in portfolio management, particularly for the purpose of risk management.
Syllabus
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