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5009114: Financial Economics

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Semester:WS 20/21
Scheduled in semester:1
Semester Hours per Week / Contact Hours:24.0 L / 18.0 h
Self-directed study time:162.0 h

Module coordination/Lecturers


Master's degree programme in Finance (01.09.2015)
Master's degree programme in Finance (01.09.2020)


  • Introduction to financial economics
  • Equilibrium and arbitrage
  • Valuation, state prices, risk-neutral probabilities
  • Expected utility, risk aversion, mean-variance theory
  • Optimal portfolios

Learning Outcomes

After completing this course, students...

  • understand basic principles in financial economics (e.g., absence of arbitrage) and can apply them in discrete-time markets,
  • link absence of arbitrage, state prices, and risk-neutral probabilities in complete and in incomplete markets,
  • understand the implications of portfolio restrictions in financial markets,
  • understand the classical models of risk and risk aversion and apply them to financial decision-making,
  • are familiar with consumption-portfolio models and their optimization in discrete time.


Lectures Method

Interactive lecture


> LeRoy, S. F., & Werner, J. (2014). Principles of financial economics (2nd ed.). Cambridge: Cambridge University Press

Exam Modalities

Written exam


25.09.202009:00 - 12:15H5 (Fabrikweg)
29.09.202009:00 - 12:15H5 (Fabrikweg)
06.10.202009:00 - 12:15H5 (Fabrikweg)
13.10.202013:15 - 16:30H4
20.10.202013:15 - 16:30H3
06.11.202009:00 - 12:15H5 (Fabrikweg)
04.12.202009:00 - 12:15H7 (Fabrikweg)


  • PWW-MA_Financial Economics LE (WS 20/21, bestätigt)