EE 431 Economics of Financial Markets and Institutions

3 (3-0-6)

Prerequisites: EE311

Money and capital markets at a micro-level. Financial assets, risks, and risk-bearing. The theory of equilibrium pricing of financial assets. CAPM and APT models. Interest rate structure. Bond and equity instruments. Financial derivatives. Asymmetric information in a financial market. The study of financial institutions, emphasizing theories about the roles and functions of commercial banks. Risk management of financial institutions. Monitoring and controlling financial institutions. The deposit insurance system and financial institution business activity from the perspective of industrial economics.