Financial economics is an exciting new field of study that
integrates the theory of finance and financial institutions into
the main body of economic theory. In doing so, it draws on insights
from general equilibrium analysis, information economics, and the
theory of contracts.
Financial Economics is a self-contained and comprehensive
introduction to the field for advanced undergraduate and
postgraduate economists and finance specialists. It develops the
main ideas in finance theory, including the CAPM, arbitrage
pricing, option pricing, and the Modigliani-Miller theorem within
an economic framework.
Students of economics are shown how finance theory derives from
foundations in economic theory, while students of finance are given
a firmer appreciation of the economic logic underlying their
favourite results. Financial Economicsprovides all the technical
apparatus necessary to read the modern literature in financial
economics and the economics of financial institutions. The book is
self-contained in that the reader is guided through branches of the
theory, as necessary, in order
to understand the main topics.
Numerous examples and diagrams illustrate the key arguments, and
the main chapters are followed by guides to the relevant literature
and exercises for students.
INTRODUCTION 1. Decision-making under Uncertainty PART I. SYMMETRIC INFORMATION: FINANCIAL MARKETS 2. Portfolio Choice 4. Arbitrage and Option Pricing 5. Firms and Financial Markets PART II. ASYMMETRIC INFORMATION: FINANCIAL CONTRACTS 6. Debt Contracts and Credit Rationing 7. Deposit Contracts and Banking 8. Regulation of Banks 9. Towards Application: Financial Markets and Financial Intermediaries REFERENCES INDEX
