ECON 337901

FINANCIAL ECONOMICS

Peter Ireland

Boston College

January 14, 2020

These lecture notes by Peter Ireland are licensed under a Creative Commons Attribution-NonCommerical-ShareAlike4.0 International (CC BY-NC-SA 4.0) License. http://creativecommons.org/licenses/by-nc-sa/4.0/.

The Structure of Financial Economics

The Structure of Financial Economics

No Arbitrage Opportunities Across Markets

Source: Eric Budish, Peter Cramton, and John Shim, “TheHigh-Frequency Trading Arms Race: Frequent Batch Auctionsas a Market Design Response,” Quarterly Journal ofEconomics Vol.130 (November 2015): pp.1547-1621.

No Arbitrage Opportunities Across Markets

Source: Budish, Cramton, and Shim (2015).

Arbitrage Opportunities Across Markets?

Source: Budish, Cramton, and Shim (2015).

Arbitrage Opportunities Across Markets

Source: Budish, Cramton, and Shim (2015).

Arbitrage Opportunities Across Markets

Source: Budish, Cramton, and Shim (2015).

The Structure of Financial Economics

The Structure of Financial Economics

Course Administration

Course webpage:

http://irelandp.com/econ3379.html

Notes/slides, handouts, problems sets and solutions, oldexams.

Course Administration

Book:

Jean-Pierre Danthine and John Donaldson, IntermediateFinancial Theory, Second (2005) or Third (2014) edition.

Recommended, but not required.

Third edition is freely available in electronic form via BClibraries.

Course Administration

Grading:

Homeworks: 20%

Midterm (Tuesday, March 17): 40%

Final (Thursday, May 7): 40%

Course Administration

Academic integrity:

http://www.bc.edu/integrity

It’s fine to work with other students on the homeworks, butplease hand in our own answers for the purposes of grading.

Your work on the midterm and final should be yours and yoursalone.