Financial Economics
MSc Economics and Business

Study programme

Depending on one’s personal preferences, the programme’s courses and electives present an excellent way to get acquainted with a variety of topics that are essential for Financial Economics. The Master’s specialisation consists of core courses, electives, seminars, and a Master’s thesis distributed over five blocks of eight weeks.

Core courses and electives help you to get acquainted with a wide range of topics that are essential for financial economics, and provide you with a solid background for attending the seminars. Seminars are the most important component of the Master’s specialisation. For these intensive courses, active participation and commitment is a prerequisite. You are expected to present excerpts of literature or case applications, ask questions, express doubts, and share your ideas in class discussions.

The specialisation allows you to select from seminars in corporate finance, international finance, and investments. The last block of the specialisation is devoted to the Master’s thesis. The thesis is written individually under close supervision by one of our academic staff members.

The curriculum consists of three tracks:

  • 33% Corporate Finance
  • 33% Investment
  • 33% International Finance

In Class

A case example: -- How do you decide on a company acquisition? How should you value a company? Making optimal decisions requires understanding of the firm’s strategy, business model, the competition in the industry, and the expected operating cash flows. It also forces you to make decisions on the financing of the deal. Is financing with a significant amount of debt an option? And what would be the preferred bidding strategy? In an actual case, you study these aspects together with comments of experienced private equity investors and investment bankers, and devise an optimal strategy, which you could advise in real life.

Disclaimer: The overview below shows the programme curriculum for the academic year 2019/2020.

    • Block 1

      • The Take-Off is the introduction event for all new students of Erasmus School of Economics. During this interesting introduction event, you will be provided with useful practical information and receive an introduction to your studies, meet your fellow students and our School.

      • The electives represent a choice of supplementary but fascinating academic views from the specialisation that you have chosen.

        Students choose four courses from the courses listed below, and one other Economics and Business master’s course, including the remaining listed courses.

      • Students choose two seminars from the seminars listed below.

    • Block 4 - 5

      • The thesis is the crown on your Master’s degree programme.

        While you have to start in early December, the last two blocks of the programme are especially devoted to the Master’s thesis. The thesis is written individually under close supervision by one of our academic staff members.

    • Block 1

      • This course follows a problem-solving approach that synthesizes ideas from game theory, real options, and strategy for corporate decision-making.

      • The aim of this course is to provide a profound and state-of-the-art insight into asset pricing, both from a theoretical and empirical perspective. 

      • Banks, insurers and pension funds feature daily in the financial press. The credit crisis has triggered a public debate on the risks, rewards and the costs of the banking, pension and insurance industry. Fundamental questions abound. Why do banks exist? Was it a good idea in 2008 to rescue Bear Stearns, the insurer AIG and let Lehman Brothers fail? What are the cost and benefits of bank supervision? Is there too much leverage in the system? Do financial conglomerates increase or lower the risks for the financial system? What about full reserve banking as an alternative for fractional reserve banking? We extensively discuss the role and risks of the financial industry and the connection with monetary policy.

      • This course is about what-why-when-where-how issues of hedging and risk monitoring. Case studies are analyzed to learn from well-known debacles such as Barings, Long-Term Capital Management, Metallgesellschaft and Orange County, and also the recent credit crisis culminating in Lehman's default and the subsequent Euro sovereign crisis are covered. 

      • A major part of this course will touch upon the field of Asset Pricing, especially in the lectures regarding the modeling of risk. A proper understanding of risk is fundamental to many financial management applications such as capital budgeting, risk management, portfolio selection and performance evaluation. 

      • The first part of the course provides students with advanced knowledge in capital structure theories that build on taxes, financial distress, and agency costs (static tradeoff theory), information asymmetry (the pecking order theory), and market timing. The second part of the course describes the developments in mergers and in corporate governance. Several practice problems will be discussed.

    • Block 4

      • This course examines how the insights of behavioral finance complement the traditional paradigm and sheds light on the asset prices determination, corporate finance decisions, and various Wall Street institutional practices. The course focuses on application of behavioral finance to two financial topics: corporate finance and investments.

      • This course consists of two modules. The first module focuses on analytical valuation techniques of fixed income instruments. The second module builds on this analytical framework to study the latest thinking in modeling and strategies of bond portfolio management.

    • Block 5

      • This course examines key issues in international finance, focusing on recent developments and incorporating theoretical, empirical, policy, and institutional dimensions. We will approach each topic from four perspectives: theory, policy, global risk, and implications for the multinational firms and investors.

      • Students choose four courses (16 ec) from the listed courses, and one other Economics and Business master’s course (4 ec), including the remaining listed courses, with the exception of the core courses from the specialisation Data Science and Marketing Analytics.

    • Block 2

      • This seminar covers several topics in the domain of Money, Credit and Banking and will provide a macroeconomic perspective on finance.

      • The goal of this seminar is to provide an overview on issues that relate to portfolio management and risk management issues in the energy markets.

      • The purpose of this seminar is twofold. First, it covers the most important papers from the behavioral finance literature, with a focus on the recent "hot topics" in the field. Second, it gives you the opportunity to engage in academic research.

      • Asset management helps individuals and organizations prepare for the future. This seminar will analyze pension funds that encompass millions of retirement accounts, endowment funds that sustain major educational institutions, and sovereign wealth funds that benefit a whole nation. The goal of this course is to develop a broad perspective on the asset management business. 

    • Block 2 or block 3

      • Corporate governance analyzes two conflicts of interest that arise in the financing of the firm.

        • The first is the conflict between shareholders and the firm's management.
        • The second conflict of interest emerges between controlling shareholder and minority shareholders. 
      • This seminar aims to provide insights in groundbreaking developments in economic and financial academic research that may have its impact on private equity investment decisions.

      • The seminar covers a wide range of derivative contracts, ranging from plain vanilla (forwards, futures, swaps and options) to more exotic (exotic options, weather and insurance derivatives). It explains arbitrage arguments, trading strategies, the use of binomial trees, Black & Scholes valuation, volatility smiles, and the ' Greeks'. You will learn about derivatives markets and how derivative instruments can be used for risk management.

      • Students will improve their understanding of, and be able to implement using empirical data and programming skills, elements of:

        • Multifactor models
        • Crosssectional anomalies
        • Quantitative investment strategies
        • Performance evaluation of professional asset managers
      • This seminar introduces students to the methods and tools used in Empirical Corporate Finance. By reading and discussing seminal papers in Empirical Corporate Finance, students will also get in touch with major results and contributions to the field.

      • Block 3

        • Econometric prerequisites (unit roots and cointegration in time series and panels, univariate and multivariate GARCH models)

          • Exchange rate theories (monetary model, overshooting model)
          • Structural models of exchange rates versus the random walk hypothesis
          • Purchasing power parity
          • Covered and uncovered interest rate parity and the forward premium puzzle
          • Government bond yield spreads
          • Financial market integration in equity and bond markets
        • This course aims at improving our understanding of financial markets and asset returns, by applying insights from psychology and other behavioural sciences. 

        • The goal of the seminar is to increase your knowledge and understanding of the relevant issues in commodity trading from a Finance perspective.