Spring 2009

The Economics of Finance

Listed in: Economics, as ECON-63


Geoffrey R. Woglom (Section 01)


A study of the role of financial markets in the efficient allocation of resources. We look at how financial markets: (1) enable the transfer of resources across time and space; (2) facilitate the reduction and management of risk; and (3) provide information about the future, which is important to public policymakers as well as private firms and individuals. The financial theories studied include: (1) the theory of present discounted values; (2) the capital asset pricing model; (3) the efficient markets hypothesis; and (4) the Black-Scholes model for the pricing of contingent claims. Requisite: Economics 54 or 58. Limited to 35 students. Spring semester. Professor Woglom.