Financial Economics - ECONJ13584
Stream Summary
Faculty: COMM - Australian School of Business
School: School of Economics
Contact: Australian School of Business Student Centre
Program: 3584 - Commerce / Information Systems
Award(s):
Bachelor of Commerce (Major)
Information valid for students commencing 2013.
Students who commenced prior to 2013 should go to the Handbook's Previous Editions
Stream Outline
Financial Economics is concerned with understanding how financial instruments are priced in markets and how individuals and firms manage financial risk.
Markets for financial instruments arise because some firms and individuals want to borrow while others want to save. A large corporation, for example, may borrow funds to purchase new plant and equipment by issuing further stock while an individual may save by purchasing stocks or government bonds. Markets for financial instruments also arise because firms and individuals want to manage financial risk. For example, a large corporation may bet against the risk of large fluctuations in the Australian - U.S. dollar exchange rate by selling its goods by way of futures contracts. Understanding how the prices of financial instruments are determined in the market place is a central concern of financial economics, along with the design of new financial derivatives.
The area of financial economics that deals with the study of real-world data is known as financial econometrics. Financial econometrics is concerned with the statistical analysis of financial data and testing the real-world applicability of asset-pricing theories. This major provides students with a thorough understanding of the economic principles that underlie the pricing and allocative role of all financial assets, whether they are stocks, bonds, futures or options.
Markets for financial instruments arise because some firms and individuals want to borrow while others want to save. A large corporation, for example, may borrow funds to purchase new plant and equipment by issuing further stock while an individual may save by purchasing stocks or government bonds. Markets for financial instruments also arise because firms and individuals want to manage financial risk. For example, a large corporation may bet against the risk of large fluctuations in the Australian - U.S. dollar exchange rate by selling its goods by way of futures contracts. Understanding how the prices of financial instruments are determined in the market place is a central concern of financial economics, along with the design of new financial derivatives.
The area of financial economics that deals with the study of real-world data is known as financial econometrics. Financial econometrics is concerned with the statistical analysis of financial data and testing the real-world applicability of asset-pricing theories. This major provides students with a thorough understanding of the economic principles that underlie the pricing and allocative role of all financial assets, whether they are stocks, bonds, futures or options.
Stream Structure
A major in Financial Economics consists of 60 UOC (10 courses). Nine (9) of these courses are specified; the other one (1) is an elective course that is chosen from the list below. This elective course must be at level 3 (i.e. ECON3XXX). This is regardless of whether you are doing a single major or taking Financial Economics as a second major.
Please note: Economics/Law students must take 96 UOC (16 courses) consisting of the major requirements (10 courses), ECON1401 Economic Analysis, and five (5) additional elective courses (including at least 3 ECON level 2 or 3 courses) as per the BEc program.
For students who complete a Financial Economics major as part of the Bachelor of Commerce, the requirements are exactly the same. While majors in the BCom are expressed as requiring 48 UOC, in the case of the Financial Economics major this excludes ECON1101 Microeconomics 1 and ECON1203 Business and Economic Statistics (or equivalent MATH course) which are compulsory core courses in the BCom.
Please note: Economics/Law students must take 96 UOC (16 courses) consisting of the major requirements (10 courses), ECON1401 Economic Analysis, and five (5) additional elective courses (including at least 3 ECON level 2 or 3 courses) as per the BEc program.
For students who complete a Financial Economics major as part of the Bachelor of Commerce, the requirements are exactly the same. While majors in the BCom are expressed as requiring 48 UOC, in the case of the Financial Economics major this excludes ECON1101 Microeconomics 1 and ECON1203 Business and Economic Statistics (or equivalent MATH course) which are compulsory core courses in the BCom.
Compulsory core courses
- ECON1101 Microeconomics 1 (6 UOC)
- ECON1102 Macroeconomics 1 (6 UOC)
- ECON1202 Quantitative Analysis (6 UOC)
- ECON1203 Business & Economic Statistics (6 UOC)
- ECON2101 Microeconomics 2 (6 UOC)
- ECON2206 Introductory Econometrics (6 UOC)
Please note: Students completing a Bachelor of Actuarial Studies or one of the Bachelor of Science specialisations are required to take equivalent MATH courses. These are substitutes and students will not receive credit for taking these ECON courses (1201 and 1203). Students should refer to the program plans for those degrees which indicate the specific MATH courses they are required to take.
Compulsory major specific courses
- ECON2209 Business Forecasting (6 UOC)
- ECON3107 Economics of Finance (6 UOC)
- ECON3206 Financial Econometrics (6 UOC)
Elective courses
- ECON3101 Markets and Public Choice (6 UOC)
- ECON3104 International Macroeconomics (6 UOC)
- ECON3106 Politics, Government and Econ (6 UOC)
- ECON3109 Econ Growth,Tech&Struct Change (6 UOC)
- ECON3110 Development Economics (6 UOC)
- ECON3114 Super and Retirement Benefits (6 UOC)
- ECON3116 International Trade (6 UOC)
- ECON3117 Retirement Saving and Spending (6 UOC)
- ECON3119 Political Economy (6 UOC)
- ECON3121 Managerial Economics (6 UOC)
- ECON3123 Economics of Corporations (6 UOC)
- ECON3124 Behavioural Economics (6 UOC)
- ECON3125 Econ of Human Capital (6 UOC)
- ECON3202 Mathematical Economics (6 UOC)
- ECON3203 Econometric Theory (6 UOC)
- ECON3208 Econometric Methods (6 UOC)
- ECON3209 Statistics for Econometrics (6 UOC)
Honours
Honours level study is also available in Financial Economics. For students wishing to consider taking Honours and taking the Financial Economics major the following courses would be recommended as a good preparation for Honours:
- ECON2102 Macroeconomics 2
- ECON3104 International Macroeconomics
- One of ECON3101 Markets and Public Choice; or ECON3121; or ECON3123
Students interested in Honours should refer to the Honours stream record for entry requirements.
Further information
Please note that these requirements may be subject to change.
Students are advised to follow requirements according to the year they commenced. Please refer to previous editions of the Online Handbook for your program requirements.
Contact the Australian School of Business Student Centre for advice.
tel: + 61 2 9385 3189
location: Ground Floor, West Wing, Australian School of Business Building
Forms, policies and procedures
Frequently asked questions
Students are advised to follow requirements according to the year they commenced. Please refer to previous editions of the Online Handbook for your program requirements.
Contact the Australian School of Business Student Centre for advice.
tel: + 61 2 9385 3189
location: Ground Floor, West Wing, Australian School of Business Building
Forms, policies and procedures
Frequently asked questions
