Financial Economics for Citizens - Detailseite

This course covers financial economics viewed from the perspective of citizens of a nation state. It includes an introduction to financial economics with a focus on riskless saving and investment, as well as the valuation of securities which (are supposed to) yield risk-free payoffs: government bonds. This part of the course will prepare the participants for the midterm exam.

After the midterm exam, the course covers the issue of sovereign default risk and, in particular, how to assess this risk for a given nation state. Moreover, we will discuss trading strategies of investors in government bond markets.

The course concludes with a two-day workshop in which students work on case studies, analyzing current issues with respect to sovereign default risk.

Lecture notes.

StO/PO BA BWL und VWL 2016: 6 LP, Modul: "Financial Markets and Social Science"

Portfolio-Exam: Course participants have to complete two assignments in order to show their learning progress.

1st assignment: learn and understand the valuation safe cash flows (with a focus on sovereign bonds), investment criteria, the instruments used in international finance, the economics of interest rates and exchange rates, basic strategies for profiting from differences between the bond yields in different countries and the implementation of the strategies in terms of algorithms. The students will demonstrate their progress by answering the questions of a multiple-choice exam.

2nd assignment: explore and apply some of the processes that major credit rating agencies use in order to determine the credit ratings of countries. Teams of students will apply a process of this sort in order to prepare presentation materials (“slides” for a talk) suitable for arguing for a down- or up-grade of specific countries (one country per team) while comparing the countries to peer countries.

The final grade will be given for the portfolio of the two assignments.

Registration deadline: 01.12.2025 - 19.12.2025

Withdrawal deadline: 07.01.2026