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EC988: Investment and the Financial System

  • Zeynep Kurter

    Module Leader
  • Deva Velivela

    Module Lecturer
15 CATS - Department of Economics
Summer Module
Spring Module

Principal Aims

EC988-15 Economics of Financial Markets

Principal Learning Outcomes

Subject Knowledge and Understanding:...understand changes in financial markets & financial crises. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, independent study. The summative assessment methods that measure the achievement of this learning outcome are: Examination.

Subject Knowledge and Understanding:...understand debt and equity securities, firms’ investment decisions analysis. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, independent study. The summative assessment methods that measure the achievement of this learning outcome are: Examination.

Subject Knowledge and Understanding:...demonstrate a comprehensive understanding of recent advances in financial markets. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, independent study. The summative assessment methods that measure the achievement of this learning outcome are: Examination.

Cognitive skills:...critically evaluate selected empirical techniques which form the basis of recent approaches to understanding the behaviour of firms in financial markets. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, independent study The summative assessment methods that measure the achievement of this learning outcome are: Examination"

Subject Specific and Professional Skills:...appraise and synthesise the relevant literature explaining how theories have been tested and the results obtained. The teaching and learning methods that enable students to achieve this learning outcome are: Lectures, independent study. The summative assessment methods that measure the achievement of this learning outcome are: Examination.

Syllabus

The syllabus may cover, but is not limited to, the following topics:

• Firms’ Investment Decisions – How do firms choose investment?

• Investment- Lagrange Optimization: Adjustment Cost and Tobin’s Q

• Financial Constraints, Financial Market Imperfections, and Investment

• Introduction to Bank runs – Diamond Dybvig model

• Stock Market Bubbles and Investment

• Systemic Risk in Financial Markets

• Investment and Uncertainty

Context

Optional Module
L1P6 - Year 1, L1P7 - Year 1
Pre or Co-requisites
Basic knowledge of calculus and econometrics.

Assessment

Assessment Method
Online Examination (100%)
Coursework Details
Online Examination (100%)
Exam Timing
May

Exam Rubric

Time Allowed: 2 Hours

Read all instructions carefully - and read through the entire paper at least once before you start entering your answers.

There are THREE questions in this paper. You must answer TWO questions (50 marks each).

Approved pocket calculators are allowed.

You should not submit answers to more than the required number of questions. If you do, we will mark the questions in the order that they appear, up to the required number of questions in each section.

Previous exam papers can be found in the University’s past papers archive. Please note that previous exam papers may not have operated under the same exam rubric or assessment weightings as those for the current academic year. The content of past papers may also be different.