• GESS /
• CDSB /
• Program /
• Finance

Finance refers to an extremely large research field. It has both a strong theoretical foundation and an unusually broad empirical basis. From a material view it deals with basic problems of individual decisions on risky financial instruments. From a classical and behavioral view, it discusses why financial institutions like banks and insurance companies exist and how they should be optimally managed, it analyzes the structure of optimal financial contracts and their values under different market regimes. Under methodological aspects it combines fruitfully advanced mathematical modelling techniques with numerical solution procedures, econometric estimation methods and statistical tests of the results. No other field in economics has confronted its theoretical results with empirical facts as much as Finance. The reason for this strong empirical orientation of Finance is the availability of excellent databases. These market data were supplemented by data on individual decision making and by data on non-traded financial contracts.

The research of the Finance Group (Albrecht, Bühler, Maug, von Thadden, Weber) covers Asset Pricing, Banking, Behavioral Finance and Decision Making, Corporate Finance, Insurance and Risk Management and therefore important subfields of Finance from a theoretical and an empirical perspective.

Asset pricing deals with theories of fair values of financial instruments and the impact of credit and liquidity risk on prices. The analysis of credit risk is of special importance for banks.

Behavioral finance has become increasingly popular in recent years. This field addresses the problems of how individuals behave and how they build their expectations.

Corporate finance deals with the optimal structuring of contracts with agents, equity and debt holders of a firm under symmetric and asymmetric information.

Risk management is strongly related with asset pricing, banking and corporate finance. It studies the exposure of financial and non-financial firms to market, credit, liquidity, operational and economic risk.

The curriculum in "Finance" reflects the demanding quantitative methods which are used in the above-mentioned fields and the strong microeconomic foundations. The core courses in the first semester are designed to give the students a strong foundation of the relevant mathematical, econometric, and microeconomic principles of finance. The courses in mathematics, microeconomics and econometrics are joined courses with the Center for Doctoral Studies in Economics. The course on “Discrete-Time Finance” covers the central problem of how to allocate consumption and investment from a financial point of view, no-arbitrage equilibria, linear pricing rules, pricing kernels, and the change of numéraire.

The core courses in the second semester represent the major subfields of finance: Individual decision making under a neoclassical and behavioral view, investment-consumption decisions and asset pricing in continuous time, and theoretical and empirical corporate finance problems. The course “Econometrics of Financial Markets” extends the common econometrics course to typical financial issues such as the estimation of dynamic market processes, testing asset pricing and market microstructure models, and designing event studies.

Program

• Accounting & Taxation
• Finance
  • Core Courses
  • Electives
  • Finance Seminar
  • Fall 2009
  • Spring 2010
• Management
• Operations & Information Systems
• English Writing Course
• Area Seminars
• CDSB-Workshop
• General Program Information for Students