EKO681 - THEORIES of FINANCE
| Course Name | Code | Semester | Theory (hours/week) |
Application (hours/week) |
Credit | ECTS |
|---|---|---|---|---|---|---|
| THEORIES of FINANCE | EKO681 | 1st Semester | 3 | 0 | 3 | 7 |
| Prequisites | - | |||||
| Course language | Turkish | |||||
| Course type | Elective | |||||
| Mode of Delivery | Face-to-Face | |||||
| Learning and teaching strategies | Lecture Drill and Practice | |||||
| Instructor (s) | ||||||
| Course objective | The objective of this course is to introduce the fundamental theories in finance. | |||||
| Learning outcomes |
| |||||
| Course Content | Purchasing Power Parity, Interest Rate Theories, Asset Markets, Capital Asset Pricing Model, Term Structure of Interest Rate, Derivatives | |||||
| References | Eichberger, J. ve I.R. Harper (1997), Financial Economics, Oxford University Press, New York. | |||||
Course outline weekly
| Weeks | Topics |
|---|---|
| Week 1 | Introduction to Finance, Financial decisions. Approaches to valuation of financial and real assets. Roles of inancial markets |
| Week 2 | Present value. Mechanics of PV calculations. Theories of determination of interest rates - Keynesian and monetarist, interest rates and inflations rates |
| Week 3 | Term structure of interest rates. Yield curve. Interest rate risk. Inflation risk. Credit risk |
| Week 4 | Common Stocks, Dividend Discount Model (DDM) |
| Week 5 | Capital Investments, Capital budgeting. Cash-flow calculations. Project Interaction |
| Week 6 | Introduction to Return and Risk: Measuring risk. Random walks |
| Week 7 | Diversification. Systematic risk and non-systematic risk. Portfolio theory. Efficient risk-return trade-off |
| Week 8 | Midterm Exam |
| Week 9 | Capital Asset Pricing Model (CAPM). Measuring betas. Applications of CAPM. Empirical evidence on CAPM |
| Week 10 | Efficient Market Hypothesis (EMH) |
| Week 11 | Tests of EMH. Implications of EMH |
| Week 12 | Basic idea of derivatives: Forwards and Futures, Forward and futures prices. Hedging with forwards and futures |
| Week 13 | Options and Their Applications: Options and their properties. Valuation of options: Binomial method and Black - Scholes model |
| Week 14 | Foreign Exchange Market, Exchange Rates in the Long Run: Law of One Price, Theory of Purchasing Power Parity |
| Week 15 | Exchange Rates in the Short Run: Interest Parity Condition, Explaining Changes in Exchange Rates |
| Week 16 | Final Exam |
Assesment methods
| Course activities | Number | Percentage |
|---|---|---|
| Attendance | 0 | 0 |
| Laboratory | 0 | 0 |
| Application | 0 | 0 |
| Field activities | 0 | 0 |
| Specific practical training | 0 | 0 |
| Assignments | 0 | 0 |
| Presentation | 1 | 20 |
| Project | 0 | 0 |
| Seminar | 0 | 0 |
| Midterms | 1 | 30 |
| Final exam | 1 | 50 |
| Total | 100 | |
| Percentage of semester activities contributing grade succes | 2 | 50 |
| Percentage of final exam contributing grade succes | 1 | 50 |
| Total | 100 | |
WORKLOAD AND ECTS CALCULATION
| Activities | Number | Duration (hour) | Total Work Load |
|---|---|---|---|
| Course Duration (x14) | 14 | 3 | 42 |
| Laboratory | 0 | 0 | 0 |
| Application | 0 | 0 | 0 |
| Specific practical training | 0 | 0 | 0 |
| Field activities | 0 | 0 | 0 |
| Study Hours Out of Class (Preliminary work, reinforcement, ect) | 14 | 7 | 98 |
| Presentation / Seminar Preparation | 1 | 20 | 20 |
| Project | 0 | 0 | 0 |
| Homework assignment | 0 | 0 | 0 |
| Midterms (Study duration) | 1 | 20 | 20 |
| Final Exam (Study duration) | 1 | 30 | 30 |
| Total Workload | 31 | 80 | 210 |
Matrix Of The Course Learning Outcomes Versus Program Outcomes
| D.9. Key Learning Outcomes | Contrubition level* | ||||
|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | |
| 1. To have the knowledge of the graduate level microeconomic and macroeconomic theory. | X | ||||
| 2. To have the knowledge of the graduate-level econometrics and mathematical techniques. | X | ||||
| 3. To conceive the relationship between economics and other fields of science. | X | ||||
| 4. To understand basic econometric techniques and be able to undertake empirical analysis using appropriate econometric tools. | X | ||||
| 5. To be able to analyze complex economic issues and to develop solutions to economic problems. | X | ||||
| 6. To complete an acceptable dissertation that advances the state of knowledge in the field of economics. | X | ||||
| 7. To be able to write research papers and effectively communicate their results both in writing and orally. | X | ||||
| 8. To be able to use the skills of modelling and empirical analysis for formulating policy options. | X | ||||
| 9. To demonstrate leadership in problem solving. | X | ||||
| 10. To adhere ethical behavior during data gathering, implementation and article writing processes. | X | ||||
| 11. be able to use information and communication technologies. | X | ||||
| 12. To have social responsibility and conciousness about the needs of the society and to develop projects in these areas. | X | ||||
*1 Lowest, 2 Low, 3 Average, 4 High, 5 Highest