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**The Financial Economics – I Course for BA (Hons) Economics Semester V, Delhi University has been taught by Mr. Dheeraj Suri. The Video Lectures are based upon the books prescribed by the University of Delhi. The Duration of Video Lectures is approximately 40 Hours.**

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**Demo Lectures**

** Click Here for Reading List of Financial Economics**

**Click Here for Reading List of Financial Economics**** ****Course Content**** of Our ****Video Lectures**

**Course Content****of Our****Video Lectures**** ****Lectures are as per the Latest Syllabus for 2021**

**Lectures are as per the Latest Syllabus for 2021****Unit 1 : Investment Theory & Portfolio Analysis**

**Chapter 1 : Theory of Interest [102 Minutes] **

**Based Upon Chapter 5, Brealy**

**Number of Lectures 2 Lectures**

**Total Duration of Lectures 102 Minutes**

**Chapter 2 : Fixed Income Securities [376 Minutes]**

**Based Upon Chapter 3, David G. Luenberger **

**Number of Lectures 6 Lectures**

**Total Duration of Lectures 376 Minutes**

**Chapter 3 : Term Structure of Interest Rate [96 Minutes] **

**Based Upon Chapter ****4, David G. Luenberger**

**4, David G. Luenberger**

**Number of Lectures 2 Lectures**

**Total Duration of Lectures 96 Minutes**

**Unit 2 : Investment Theory & Portfolio Analysis**

**Chapter 4 : Mean Variance Portfolio Theory [230 Minutes] **

**Based Upon ****Chapter 6, David G. Luenberger**

**Chapter 6, David G. Luenberger**

**Number of Lectures 4 Lectures**

**Total Duration of Lectures 230 Minutes**

**Chapter 5 : The Capital Assets Pricing Model [192 Minutes]**

**Based Upon Chapter ****7, David G. Luenberger**

**7, David G. Luenberger**

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 192 Minutes**

**Unit 3 : Futures, Options and Other Derivatives**

**Chapter 6 : Forward & Future Contract [144 Minutes] **

**Based Upon Chapter 2, Basu & Hull**

**Number of Lectures 2 Lectures**

**Total Duration of Lectures 144 Minutes**

**Chapter 7 : Futures Prices [107 Minutes]**

**Based Upon Chapter 5, Basu & Hull **

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 107 Minutes**

**Chapter 8 : Hedging Using Futures [140 Minutes] **

**Based Upon Chapter 3, Basu & Hull**

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 140 Minutes**

**Chapter 9 : Interest Rate Futures [70 Minutes]**

**Based Upon Chapter 6, Basu & Hull **

**Number of Lectures 2 Lectures**

**Total Duration of Lectures 70 Minutes**

**Chapter 10 : Mechanics of Options Market [134 Minutes] **

**Based Upon Chapter 10, Basu & Hull**

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 134 Minutes**

**Chapter 11 : Properties of Stock Options [152 Minutes]**

**Based Upon Chapter 11, Basu & Hull **

**Number of Lectures 2 Lectures**

**Total Duration of Lectures 152 Minutes**

**Chapter 12 : Options Strategies [160 Minutes] **

**Based Upon Chapter 12, Basu & Hull**

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 160 Minutes**

**Chapter 13 : Binomial Trees [60 Minutes]**

**Based Upon Chapter 13, Basu & Hull **

**Number of Lectures 3 Lectures**

**Total Duration of Lectures 130 Minutes**

**Chapter 14 : ITO’s Lemma [ Minutes] **

**Based Upon Chapter 14, Basu & Hull**

**Number of Lectures 1 Lectures**

**Total Duration of Lectures Minutes**

**Chapter 15 : The Black Scholes Merton Model [ Minutes]**

**Based Upon Chapter 15, Basu & Hull **

**Number of Lectures 3 Lectures**

**Total Duration of Lectures Minutes**

**Chapter 16 : The Greek Letters [ Minutes] **

**Based Upon Chapter 19, Basu & Hull**

**Number of Lectures 1 Lectures**

**Total Duration of Lectures Minutes**

**End of Syllabus**

** ****Syllabus for Financial Economics**** as prescribed by University of Delhi**

HE-54-Financial-Economics-Syllabus

**Syllabus for Financial Economics****as prescribed by University of Delhi****Course Description**

**Financial Economics (HE54)**

**Discipline Specific Elective (DSE) Credit: 6**

**Course Objective**

This course provides a strong theoretical foundation and an economic framework to understand the world of modern finance. Major topics in the course include: time value of money; fixed-income securities; bond pricing and the term structure of interest rates; portfolio theory and pricing models such as the capital asset pricing model; hedging, speculation, and arbitrage; futures and options contracts; determination of forward and futures prices; trading strategies involving options; binomial trees; and the Black-Scholes-Merton option pricing model

**Course Learning Outcomes**

Students acquire extensive theoretical knowledge in portfolio risk management, capital asset pricing, and the operation of financial derivatives. The course familiarises students with the terms and concepts related to financial markets and helps them comprehend business news/articles better. The course also helps to enhance a student’s understanding of real life investment decisions. The course has a strong employability quotient given the relatively high demand for skilled experts in the financial sector.

**Unit 1**

Investment theory and portfolio analysis: deterministic cash flow streams; basic theory of interest; discounting and present value; internal rate of return; evaluation criteria; fixed-income securities; bond prices and yields; interest rate sensitivity and duration; immunisation; the term structure of interest rates; yield curves; spot rates and forward rates

**Unit 2**

Single period random cash flows; mean-variance portfolio theory; random asset returns; portfolios of assets; portfolio mean and variance; feasible combinations of mean and variance; mean-variance portfolio analysis: the Markowitz model and the two-fund theorem; risk-free assets and the one-fund theorem. CAPM: the capital market line; the capital asset pricing model; the beta of an asset and of a portfolio; security market line; use of the CAPM model in investment analysis and as a pricing formula; the CAPM as a factor model, arbitrage pricing theory

**Unit 3**

Futures, options and other derivatives: introduction to derivatives and options; forward and futures contracts; options; other derivatives; the use of futures for hedging, stock index futures; forward and futures prices; interest rate futures and duration-based hedging strategies, option markets; call and put options; factors affecting option prices; put-call parity; option trading strategies: spreads; straddles; strips and straps; strangles; the principle of arbitrage; discrete processes and the binomial tree model; risk neutral valuation; stochastic process (continuous variable, continuous time), the Markov property, Itô’s lemma; the idea underlying the Black Scholes-Merton (BSM) differential equation, BSM pricing formulas; the Greek letters

**References**

- Brealey, R., Myers, S., Allen, F., Mohanty, P. (2013). Principles of corporate finance, 10th ed. Tata McGraw-Hill.
- Hull, J., Basu, B. (2017). Options, futures, and other derivatives, 9th ed. Pearson Education.
- Luenberger, D. (2013). Investment science. Oxford University Press.