FINANCIAL MICROECONOMICS

Prerequisites & course information

Requisites: Graduate/professional standing Course Designation: Grad 50% - Counts toward 50% graduate coursework requirement Repeatable for Credit: No Last Taught: Fall 2026 Learning Outcomes: 1. Formulate the classic consumption-based framework and financial equilibrium Audience: Graduate 2. Derive the predictions for portfolio choice, asset pricing, and social efficiency Audience: Graduate 3. Recover Fisher prices for YTM of treasury bonds and use these prices to valuate fixed income assets (bonds, mortgages) Audience: Graduate 4. Recover Stochastic Discount Factor (SDF) from option prices and valuate risky assets (stocks, options) Audience: Graduate 5. Understand the implication of SDF for a risk premium Audience: Graduate 6. Model financial markets with default and collateral and systemic risk Audience: Graduate 7. Model thin markets with institutional investors and insider’s trading Audience: Graduate Learning Outcomes: 1. Formulate the classic consumption-based framework and financial equilibrium Audience: Graduate 2. Derive the predictions for portfolio choice, asset pricing, and social efficiency Audience: Graduate 3. Recover Fisher prices for YTM of treasury bonds and use these prices to valuate fixed income assets (bonds, mortgages) Audience: Graduate 4. Recover Stochastic Discount Factor (SDF) from option prices and valuate risky assets (stocks, options) Audience: Graduate 5. Understand the implication of SDF for a risk premium Audience: Graduate 6. Model financial markets with default and collateral and systemic risk Audience: Graduate 7. Model thin markets with institutional investors and insider’s trading Audience: Graduate