Financial Economics

This is a complete listing of all economics courses. Not all courses are offered each year.
Click here for a list of currenly offered courses.

14.416J Introduction to Financial Economics
Prereq: 14.121 and 14.122
Foundations of modern financial economics; individuals' consumption and portfolio decisions under uncertainty; valuation of financial securities. Topics include expected utility theory; stochastic dominance; mutual fund separation; portfolio frontiers; capital asset pricing model; arbitrage pricing theory; Arrow-Debreu economies; consumption and portfolio decisions; spanning; options; market imperfections; no-trade theorems; rational expectations; financial signaling. Primarily for doctoral students in accounting, economics, and finance.

14.440J Advanced Financial Economics I
Prereq: 15.416J
Covers advanced topics in the theory of financial markets with a focus on continuous time models. Topics include multiperiod securities markets and martingales; pricing of contingent securities such as options; optimal consumption and portfolio problems of an individual; dynamic equilibrium theory and the intertemporal capital asset pricing model; term structure of interest rates; and equilibrium with asymmetric information, transaction costs, and borrowing constraints. Primarily for doctoral students in accounting, economics, and finance.

14.441J Advanced Financial Economics II
Prereq: 14.121, 14.122, or 15.416J
Surveys selected topics in current advanced research in corporate finance. Theoretical and empirical analyses of corporate financing and investment decisions. Some background in information economics and game theory is useful. Primarily for doctoral students in accounting, economics, and finance.

14.442J Advanced Financial Economics III
Prereq: 14.382, 15.416J, or permission of instructor
Recent empirical methods in finance, including the estimation and testing of market efficiency, the random walk hypothesis, the CAPM/APT, various term structure models, option pricing theories, and market microstructures; performance evaluation; bond rating and default analysis; event study methodology; continuous-time econometrics; and general time series methods. An empirical term project is required. Some econometric background and rudimentary computer programming skills are assumed. Primarily for doctoral students in accounting, economics, and finance.