• Offered by Research School of Economics
  • ANU College ANU College of Business and Economics
  • Course subject Economics
  • Areas of interest Economics, Finance
  • Academic career Undergraduate
  • Course convener
    • Prof Kieron Meagher
  • Mode of delivery In Person
  • Offered in First Semester 2019
    See Future Offerings

This course examines the economic principles that determine the allocation of resources through time in market economies. It uses supply and demand relationships to value capital assets (or projects more generally). There is a detailed treatment of the effects of risk and taxes on capital asset prices, and the Modigliani-Miller financial policy irrelevance theorems are derived and examined in detail. The impact of modern contracting theory on our understanding of financial economics will also be discussed.

Learning Outcomes

  •   be exposed to the classical finance model that underpins modern finance;
  • understand how securities are priced and affected by the institutional arrangements in securities markets, including taxes and other government regulations,
  • understand the role played by time, uncertainty, information and inflation in evaluating financial instruments;
  • know the role played by arbitrage in finance markets and its impact on security prices;
  • understand how security prices are determined in the Capital Asset Pricing Model, and the role played by the assumptions in the model;
  • know the assumptions behind the the Modigliani and Miller (M-M) financial policy irrelevance theorems as basis for understanding the factors that determine the debt-equity and dividend policy choices of firms.
  • understand to the role of asymmetric information in various financial markets.
  • understand how contractual incompleteness can impact corporate financial decisions.

Other Information

See the course outline on the College courses page. Outlines are uploaded as they become available. 

Indicative Assessment

Assessment will consist of a Final Exam, mid-semester exam(s), in-class quizzes and a project, or some combination thereof. See the course outline for details.

The ANU uses Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. While the use of Turnitin is not mandatory, the ANU highly recommends Turnitin is used by both teaching staff and students. For additional information regarding Turnitin please visit the ANU Online website.

Workload

10-12 hours per week

Requisite and Incompatibility

To enrol in this course you must have completed ECON2101/2111 Microeconomics 2 (P or H).

Prescribed Texts

To be confirmed in course outline.

Preliminary Reading

Elton, E.J. and Gruber, M.J., Modern Portfolio Theory and Investment Analysis (5th edition), John Wiley and Sons, 1995
Hirschliefer, J., Investment, Interest, and Capital, Prentice Hall, 1970.

Fees

Tuition fees are for the academic year indicated at the top of the page.  

If you are a domestic graduate coursework or international student you will be required to pay tuition fees. Tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.

Student Contribution Band:
Band 3
Unit value:
6 units

If you are an undergraduate student and have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). You can find your student contribution amount for each course at Fees.  Where there is a unit range displayed for this course, not all unit options below may be available.

Units EFTSL
6.00 0.12500
Domestic fee paying students
Year Fee
2019 $4140
International fee paying students
Year Fee
2019 $5460
Note: Please note that fee information is for current year only.

Offerings and Dates

The list of offerings for future years is indicative only

First Semester

Class number Class start date Last day to enrol Census date Class end date Mode Of Delivery
4649 25 Feb 2019 04 Mar 2019 31 Mar 2019 31 May 2019 In Person

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