The Economics of Financial Markets

This course studies the money market, the bond market, the foreign exchange market, the stock market, and the derivatives market. It provides the analytical skills necessary to understand forces that determine prices of financial and real assets. It also develops a system of tools to show how interest rates, prices of bonds, international capital flows, and exchange rates are simultaneously determined. Finally, it demonstrates how firms use financial derivatives, such as futures, options, and swaps to hedge against risk.