Economics of Financial Markets (ECON30024)

Undergraduate level 3Points: 12.5On Campus (Parkville)

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Overview

Availability
Semester 1
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The subject is a combination of principle and practice. It provides an overview of the economic principles governing financial markets; then provides insights into some important empirical and practical issues concerning the operation of financial markets; and concludes with a discussion of some practical issues associated with Australian financial markets.

Intended learning outcomes

On successful completion of this subject, students should be able to:

  • Explain and analyse the role of capital markets in consumption and investment decision-making under conditions of certainty and uncertainty
  • Explain how economic theory applies to financial markets
  • Describe how economic theory can provide testable restrictions on financial data
  • Analyse the main empirical results that have been established for financial markets
  • Critically evaluate economic policy issues associated with financial markets
  • Synthesise different theories and ideas, such as alternative models of asset pricing and portfolio allocation
  • Apply theories to the real world - how the shape of yield curves can be used to forecast inflation in Australia for example
  • Evaluate the relevance of competing theories. For instance, the extent to which alternative analyses can be used to predict the market price of different countries

Generic skills

  • High level of development: written communication; problem solving; application of theory to practice; interpretation and analysis; critical thinking; synthesis of data and other information; evaluation of data and other information.
  • Moderate level of development: oral communication; collaborative learning; team work; statistical reasoning; accessing data and other information from a range of sources; receptiveness to alternative ideas.
  • Some level of development: use of computer software.

Last updated: 20 March 2025

Eligibility and requirements

Prerequisites

Students must meet one of the following prerequisite options:

Option 1 - Standard quantitative path

All of

Code Name Teaching period Credit Points
ECON20001 Intermediate Macroeconomics
Semester 2 (On Campus - Parkville)
 12.5
ECON20002 Intermediate Microeconomics
Summer Term (On Campus - Parkville)
Semester 1 (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
 12.5

AND

One of

Code Name Teaching period Credit Points
ECOM20001 Econometrics 1
Semester 1 (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
 12.5
ECON20003 Quantitative Methods 2
Semester 1 (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
 12.5

Option 2 - Mathematics quantitative path

Code Name Teaching period Credit Points
MAST20005 Statistics
Semester 2 (On Campus - Parkville)
Summer Term (On Campus - Parkville)
 12.5

AND

One of

Code Name Teaching period Credit Points
MAST20004 Probability
Semester 1 (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
 12.5
MAST20006 Probability for Statistics
Semester 1 (On Campus - Parkville)
Semester 2 (On Campus - Parkville)
 12.5

Corequisites

None

Non-allowed subjects

None

Recommended background knowledge

Please refer to Prerequisites and Corequisites.

Inherent requirements (core participation requirements)

The University of Melbourne is committed to providing students with reasonable adjustments to assessment and participation under the Disability Standards for Education (2005), and the Assessment and Results Policy (MPF1326). Students are expected to meet the core participation requirements for their course. These can be viewed under Entry and Participation Requirements for the course outlines in the Handbook.

Further details on how to seek academic adjustments can be found on the Student Equity and Disability Support website: http://services.unimelb.edu.au/student-equity/home

Last updated: 20 March 2025

Assessment

DescriptionTimingPercentage

Assignment 1

  • 600 words
Week 56%

Mid-semester examination

  • 45 minutes
Week 715%

Assignment 2

  • 600 words
Week 119%

Tutorial Participation

Throughout the semester10%

End-of-semester examination

  • 2 hours
Hurdle requirement: To pass this subject students must pass the end of semester examination.		During the examination period60%

Last updated: 20 March 2025

Dates & times

  • Semester 1
    Principal coordinatorMay Li
    Mode of deliveryOn Campus (Parkville)
    Contact hoursOne 2-hour lecture and a 1-hour tutorial per week
    Total time commitment170 hours
    Teaching period 3 March 2025 to 1 June 2025
    Last self-enrol date14 March 2025
    Census date31 March 2025
    Last date to withdraw without fail 9 May 2025
    Assessment period ends27 June 2025

    Semester 1 contact information

    shuyunl@unimelb.edu.au

Time commitment details

170 Hours

What do these dates mean

Visit this webpage to find out about these key dates, including how they impact on:

  • Your tuition fees, academic transcript and statements.
  • And for Commonwealth Supported students, your:
       -  Student Learning Entitlement. This applies to all students enrolled in a Commonwealth Supported Place (CSP).
     

    Subjects withdrawn after the census date (including up to the ‘last day to withdraw without fail’) count toward the Student Learning Entitlement.

Last updated: 20 March 2025

Further information

Last updated: 20 March 2025