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2011/2012  KAN-AEF_AE57  Capital Market Theory

English Title
Capital Market Theory

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Full Degree Master
Duration One Semester
Course Period Autumn
Time Table Please see course schedule at e-Campus
Study Board
Study Board for MSc in Economics and Business Administration
Course Coordinator
  • Søren Hvidkjær - Department of Finance
Søren Hvidkjær - Dept. of Finance
Main Category of the Course
  • Economics, macro economics and managerial economics
Last updated on 29 maj 2012
Learning Objectives
This course provides the student with the fundamental theories of pricing of financial instruments.

The purpose of this course is to provide the student with fundamental theories of pricing of financial instruments. At the end of the course, students should
be familiar with theories and models of portfolio selection, pricing of shares, bonds, derivatives, assets allocation over time as well as concepts of and tests of capital market efficiency
be able to apply the theories in solving portfolio problems, pricing issues and, in evaluation of portfolio performance in practice.

At the end of the course, students should:
  • Be familiar with theories and models of portfolio selection, pricing of shares, bonds, derivatives, assets allocation over time as well as concepts of and tests of capital market efficiency
  • Be able to apply the theories in solving portfolio problems, pricing issues and, in evaluation of portfolio performance in practice.
Examination
Capital Market Theory
Capital Market Theory:
Assessment Written Exam
Marking Scale 7-step scale
Censorship No censorship
Exam Period October, October/November
Aids Closed Book
Duration 4 Hours
The exam has the form of an individual 4-hour closed book exam (i.e. neither written materials nor technical aids are allowed at the exam, except from non-electronic language dictionaries and Texas Instruments TI-30X IIS (solar), Texas Instruments TI-30X IIB (battery), TI-30X IIS/IIB, TI-30XS MultiView and TI-30XB MultiView). Cf. The Regulations for written tests at CBS. The regular exam takes place in December. The make-up/ re-exam takes place in February.
Course Content

This course is a foundation course and is complementary to Corporate Finance.

This course in financial economics will focus on theories of pricing in capital markets. The main issues are: Choice under uncertainty; Selection of an optimal portfolio for the investor given preferences for return and aversion to risk; Pricing of equity; Pricing of bonds; Pricing of derivative instruments i.e. options, futures, and swaps. Examples of use of the instruments in portfolio management and discussions of the efficiency of the capital market are also part of the course.

Teaching Methods
Lectures mixed with exercices.
Literature

Preliminary literature.
Bodie, Kane and Marcus, Investments and Portfolio Management, McGraw-Hill, ISBN 9780071289146