Investment, Finance and Asset Pricing ECON5068
- Academic Session: 2022-23
- School: Adam Smith Business School
- Credits: 20
- Level: Level 5 (SCQF level 11)
- Typically Offered: Semester 1
- Available to Visiting Students: No
Investment variation in fixed capital and to some degree other productive assets (e.g. inventories) by companies is a key driving factor of economic cycles. This variation in investment typically goes hand in hand with variation in asset prices, as the new capital affects companies' valuation in bond and stock markets. Moreover, companies' investment policy depends on finance-its source, price and availability. The course provides a rigorous analysis of various theories of firm level investment with an emphasis on the relationship between the finance and investment decisions.
Timetable: 10 weeks of lectures in 2hr blocks, 5 weeks of 1 hr Labs and 3 weeks of 1 hr Tutorials.
2 x Take-home Exam
1, 2, 4, 5
The course aims are (a), to provide students a foundation in analytical and computational methods to be able to analyze problems of a dynamic and stochastic nature, such as firm level investment and (b), to provide students all the relevant theories of investment in capital with an emphasis on the nexus between investment, finance and asset pricing. In relation to (b) students will also be introduced to various empirical tests that seek to discriminate between alternative investment theories.
Intended Learning Outcomes of Course
By the end of this course students will be able to:
■ formulate dynamic economic problems in a logically coherent fashion
■ apply advanced analytical methods to the solution of dynamic and stochastic economic problems
■ apply numerical methods to solve dynamic and stochastic economic models computationally
■ demonstrate knowledge of alternative investment theories and explain how they are tested empirically
■ reason logically and work analytically
■ communicate effectively and clearly in written and oral form
Minimum Requirement for Award of Credits
Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.