1) Capital asset pricing model (CAPM): The old view.
2) Back to fundamentals in economic analysis: financial markets as an insurance scheme.
- The role of financial markets
- The meaning of Risk sharing
3) An introduction to the consumption based model. WE apply the approach based on tertemporal consumption utility optimization to the problem of pricing single assets. The CAPM and the multifactor models as special cases of the consumption based
4) Empirical evidence I. The consumption based model and the equity premium and risk-free rate puzzles
5) How can we explain the poor empirical performance of the consumption based model?
6) Empirical evidence II. The relation between prices, dividends and returns. Are returns forecastable?
7) Empirical evidence III Tests of CAPM and multifactor models 9) Behavioural finance: are markets irrational? (see downloadable materials)
