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Course profile

Financial Economics (ECON2103)

Study period
Sem 1 2025
Location
St Lucia
Attendance mode
In Person

Course overview

Study period
Semester 1, 2025 (24/02/2025 - 21/06/2025)
Study level
Undergraduate
Location
St Lucia
Attendance mode
In Person
Units
2
Administrative campus
St Lucia
Coordinating unit
Economics School

Modern finance theory has its foundations in economics. This course will provide an in-depth analysis of economic decision making in an uncertain environment as well as the implications for asset pricing and contract design. Students will learn to use economic tools enabling them to solve real world complex problems in the financial sphere.

In this course we study how economic theory solves problems in financial markets. ᅠFinancial Economics is a field that studies how people and markets make financial decisions. It covers concepts like how money's value changes over time, the relationship between risk and return, pricing of assets like stocks and bonds, and the efficiency of markets. In this course, weᅠlearn important concepts and topics in financial economics. ᅠOverall, the courseᅠaims to provide a better understanding of financial economics by using contractᅠtheory and economics under uncertainty.

Course requirements

Prerequisites

You'll need to complete the following courses before enrolling in this one:

ECON2010 or 2011

Recommended prerequisites

We recommend completing the following courses before enrolling in this one:

ECON1050

Course contact

School enquiries

School Enquiries, School of Economics

All enquiries regarding student and academic administration (i.e. non-course content information, e.g., class allocation, timetables, extension to assessment due date, etc.) should be directed toᅠenquiries@economics.uq.edu.au.ᅠ

Enquiries relating specifically to course content should be directed to the Course Coordinator/Lecturer.

Course staff

Lecturer

Tutor

Mr Yunlong Liu
Miss Guan-Jia Huang

Timetable

The timetable for this course is available on the UQ Public Timetable.

Additional timetable information

Lectures commence in Teaching Week 1.

Tutorials commence in Teaching Week 2.

Please see the Learning Activities section of this Course Profile for the timetabling implications of public holidays.

Important Dates:

·        Public Holidays: Fri 18 April (Good Friday), Mon 5ᅠMay (Labour Day).

·        Mid-Semester Break: 21ᅠApril - 25ᅠApril. Semester 1 classes recommence on Mon 28ᅠApril.

Students should refer to the timetable prior to the commencement of classes to ensure that they have the most up to date information, as from time to time late room changes may occur.

Aims and outcomes

Although at first financial systems may appear to be complicated, financial economics can provide a straightforward analytical and descriptive picture of how all financialᅠsystems work.ᅠ At the same time, microeconomic theory can offerᅠa theoretical framework for analyzing the economic behavior of individuals who are regarded either as consumers of products or as managers of firms.ᅠ Through this course, students will learnᅠhow assets are priced, we evaluate risks involved in investment, and how firms manage their investment.

Learning outcomes

After successfully completing this course you should be able to:

LO1.

Use economic theories to analyse choices under uncertainty in the context of financial markets

LO2.

Apply economic theories to explain how risk averse investors optimize their choices

LO3.

Demonstrate how to price financial assets using financial economic theories

LO4.

Illustrate the impact of asymmetric information on financial transactions

LO5.

Identify financial phenomena and assess their implications for economies

Assessment

Assessment summary

Category Assessment task Weight Due date
Tutorial/ Problem Set Tutorial Preparation 10%

3/03/2025 - 26/05/2025

Due at 1pm on Mondays. For 5 May (Labour day), the due date is 1pm on 6 May (Tuesday).

Paper/ Report/ Annotation, Essay/ Critique Assignment 25%

9/05/2025 4:00 pm

Presentation Group Presentation 25%

19/05/2025

26/05/2025

Examination Final Exam
  • In-person
40%

End of Semester Exam Period

7/06/2025 - 21/06/2025

Assessment details

Tutorial Preparation

Mode
Written
Category
Tutorial/ Problem Set
Weight
10%
Due date

3/03/2025 - 26/05/2025

Due at 1pm on Mondays. For 5 May (Labour day), the due date is 1pm on 6 May (Tuesday).

Learning outcomes
L01, L02, L03, L04, L05

Task description

Students need to make a tutorial submission for all tutorials. Submission should be done through Blackboard. The due date is 1pm on Mondays. For 5 May (Labour day), the due date is 1pm on 6 May (Tuesday).

** This task evaluates student's abilities, skills and knowledge without the aid of Artifical Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.

Submission guidelines

Blackboard.

Deferral or extension

You may be able to apply for an extension.

Late submission

You will receive a mark of 0 if this assessment is submitted late.

Unless approved by the course coordinator, late submissions will be marked as 0.

Assignment

Mode
Written
Category
Paper/ Report/ Annotation, Essay/ Critique
Weight
25%
Due date

9/05/2025 4:00 pm

Learning outcomes
L03, L04, L05

Task description

1. The questions will be available at a posted time that will be notified.

2. It will consist of mainly essays with some short answer questions including calculations.

3. Further information will be made available on Blackboard prior to the assessment.

4. Submission should be done during the period stated as "Due Date".

* This task evaluates student's abilities, skills and knowledge without the aid of Artifical Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.

Submission guidelines

Deferral or extension

You may be able to apply for an extension.

Late submission

A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.

Group Presentation

Mode
Activity/ Performance
Category
Presentation
Weight
25%
Due date

19/05/2025

26/05/2025

Learning outcomes
L01, L02

Task description

Students are expected to present as a group for the last two weeks of the course.

Presentations will be recorded for the purpose of marking but will not be made available due to privacy.

* Artificial Intelligence (AI) provides emerging tools that may support students in completing this assessment task. Students may appropriately use AI in completing this assessment task.  Students must clearly reference any use of AI in each instance. A failure to reference generative AI use may constitute student misconduct under the Student Code of Conduct.

Submission guidelines

Deferral or extension

You may be able to apply for an extension.

Late submission

You will receive a mark of 0 if this assessment is submitted late.

Unless approved by the course coordinator, late submissions will be marked as 0.

Final Exam

  • In-person
Mode
Written
Category
Examination
Weight
40%
Due date

End of Semester Exam Period

7/06/2025 - 21/06/2025

Learning outcomes
L01, L02, L03, L04, L05

Task description

1. It will consist of MCQ (or/and Yes/No), short answers including calculations, and essays. 

2. Further information will be made available on Blackboard prior to the Exam. 

3. This is cumulative and covers all the materials for the course. 

4. The duration is 120 minutes and 10 minutes reading time. 

* This assessment task is to be completed in-person. The use of generative Artificial Intelligence (AI) tools will not be permitted. Any attempted use of Generative AI may constitute student misconduct under the Student Code of Conduct.

Exam details

Planning time 10 minutes
Duration 120 minutes
Calculator options

(In person) Casio FX82 series only or UQ approved and labelled calculator

Open/closed book Closed Book examination - no written materials permitted
Exam platform Paper based
Invigilation

Invigilated in person

Submission guidelines

Deferral or extension

You may be able to defer this exam.

Course grading

Full criteria for each grade is available in the Assessment Procedure.

Grade Cut off Percent Description
1 (Low Fail) 0% - 29%

Absence of evidence of achievement of course learning outcomes.

2 (Fail) 30% - 46%

Minimal evidence of achievement of course learning outcomes.

3 (Marginal Fail) 47% - 49%

Demonstrated evidence of developing achievement of course learning outcomes

4 (Pass) 50% - 64%

Demonstrated evidence of functional achievement of course learning outcomes.

5 (Credit) 65% - 74%

Demonstrated evidence of proficient achievement of course learning outcomes.

6 (Distinction) 75% - 84%

Demonstrated evidence of advanced achievement of course learning outcomes.

7 (High Distinction) 85% - 100%

Demonstrated evidence of exceptional achievement of course learning outcomes.

Additional course grading information

A student’s final overall end of semester percentage mark will be rounded to determine their final grade.

For example, 64.5% rounds to 65%, while 64.4% rounds to 64%.

Supplementary assessment

Supplementary assessment is available for this course.

Additional assessment information

Plagiarism

The School of Economics is committed to reducing the incidence of plagiarism. Further information on plagiarism and how to avoid an allegation of plagiarism is available in this course profile under Policies & Procedures. Please refer to the Academic Integrity Module (AIM). It is strongly recommended that you complete the AIM if you have not already done so.

Learning resources

You'll need the following resources to successfully complete the course. We've indicated below if you need a personal copy of the reading materials or your own item.

Library resources

Find the required and recommended resources for this course on the UQ Library website.

Learning activities

The learning activities for this course are outlined below. Learn more about the learning outcomes that apply to this course.

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Learning period Activity type Topic
Week 1

(24 Feb - 02 Mar)

Lecture

Lecture 1

Topic: Introduction to Financial Economics

Learning outcomes: L01, L02

Multiple weeks

From Week 2 To Week 13
(03 Mar - 01 Jun)

Tutorial

Tutorials start

Week 2

(03 Mar - 09 Mar)

Lecture

Lecture 2

Topic: The Foundation of Financial Economics

Learning outcomes: L01, L02

Week 3

(10 Mar - 16 Mar)

Lecture

Lecture 3

Topic: Investment Decision and Asset Pricing

Learning outcomes: L03

Week 4

(17 Mar - 23 Mar)

Lecture

Lecture 4

Topic: Asymmetric Information and Financial Contract

Learning outcomes: L03, L04, L05

Week 5

(24 Mar - 30 Mar)

Lecture

Lecture 5

Topics: Risk and Insurance

Learning outcomes: L03, L04, L05

Week 6

(31 Mar - 06 Apr)

Lecture

Lecture 6

Topic: CAPM

Learning outcomes: L03, L04, L05

Week 7

(07 Apr - 13 Apr)

Lecture

Lecture 7

Topic: Efficient Market Hypothesis and Behavioral Finance

Learning outcomes: L03, L04, L05

Week 8

(14 Apr - 20 Apr)

No student involvement (Breaks, information)

Good Friday

No Tutorials-Students who would normally attend tutorial on this day are advised to attend another session, for this week only.

Lecture

Lecture 8

Topic: Financial Crisis and Economic Theory

Learning outcomes: L03, L04, L05

Mid-sem break

(21 Apr - 27 Apr)

No student involvement (Breaks, information)

Break - No lecture & tutorials

Week 9

(28 Apr - 04 May)

Lecture

Lecture 9

Topic: Financial Regulation and Introduction to Cryptocurrency

Learning outcomes: L03, L04, L05

Week 10

(05 May - 11 May)

No student involvement (Breaks, information)

Labour Day

No Tutorials-Students who would normally attend tutorial on this day are advised to attend another session, for this week only. Tutorial submission for this week is due on 6 May.

Lecture

Lecture 10

Topic: Decentralised Finance and Review

Learning outcomes: L03, L04, L05

Week 11

(12 May - 18 May)

Lecture

Review

Overview of the Course

Week 12

(19 May - 25 May)

Workshop

Students Presentation

Week 13

(26 May - 01 Jun)

Workshop

Students Presentation

Policies and procedures

University policies and procedures apply to all aspects of student life. As a UQ student, you must comply with University-wide and program-specific requirements, including the:

Learn more about UQ policies on my.UQ and the Policy and Procedure Library.