This module equips students with the building blocks of economics that are important for a good understanding of finance. The course’s main aim is to develop the student’s understanding of decision-making in an uncertain world. The course discusses the concepts of risk, risk aversion, expected utility and their implications for portfolio choice. It also covers behavioural theories. The module presents both the theory and the empirical evidence, thus enabling the students to compare theory and practice.
Throughout the module, students will learn about the applications of these economic principles to decision-making when faced with risk and uncertainty. While the lectures introduce the conceptual framework, the seminars are more problem-based. The assessment is conducted via an individual exam (100%) at the end of the course. Overall, the students will develop a range of skills, including problem-solving and communication skills.