Current course numberEconomics 382 (next offering uncertain but probably 2007-8; not offered 2006-7)
Previous course number
: Economics 162

Current catalogue description:  “Study of important topics in finance, such as capital structure, risk, uncertainty, and portfolio theory; agency costs; market efficiency; options theory. 

Course summary (from previous course offering in Spring 2005):  Experts in economics, finance, mathematics, and psychology have studied extensively the workings and efficiency of financial markets, especially large equities markets such as the New York Stock Exchange.  Their opinions and the evidence they have generated matter for a variety of reasons to the investing public, academic economists, policy makers, and voters. The majority of class time is set aside for discussion of varied perspectives on market processes and market efficiency, from the following five books:

  1. The classic exposition and defense of the efficient markets hypothesis (EMH), A Random Walk Down Wall Street, by economics professor Burton Malkiel;

  2. A distinctly more skeptical view of the EMH and how to value businesses, How to Think Like Benjamin Graham and Invest Like Warren Buffett, by law professor Lawrence A. Cunningham;

  3. A new and distinctive approach to the risk of investing in equities, The (Mis)Behavior of Markets:  A Fractal View of Risk, Ruin and Reward, by eminent mathematician Benoit Mandelbrot and journalist Richard Hudson;

  4. A case study entitled What Went Wrong at Enron:  Everyone’s Guide to the Largest Bankruptcy in U.S. History, by Peter C. Fusaro and Ross M. Miller, experts who have done varied work including consulting and research;

  5. The classic study Manias, Panics and Crashes: A History of Financial Crises, by economics professor and financial historian Charles P. Kindleberger.

Each student will serve as a “discussion expert” twice.  The remaining class time will be set aside for presentations of student papers. Each student will write a major paper (generally 15-25 pages) on some aspect of market processes or market efficiency.  The paper will be distributed in advance to the class and the author will lead a workshop-style discussion of about 50 minutes. No examinations are scheduled.

This branch of Alaska's first bank, in Skagway, is now part of a larger one.

The world of finance is intertwined with many others--even sports.

Top Banner:  pennies embedded in an ice wall at the Ice Palace, St. Paul Winter Carnival, 2004.

Prerequisites:  Economics 241 (previously 41) and 334 (previously 134).  Accounting 10 and familiarity with spreadsheets are also useful, especially for those who want to do an empirical paper.

The course carries a WAC designation in the General Education Program.


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Last Updated: 07/12/06 02:44 PM