Quantitative Techniques for Financial Economics: I

EMEC020U

Lecturer: Ranch Patel

Year 1

Aims

This course introduces the basic quantitative techniques required in other courses of the degree programme. The aim is to show how these techniques work and how they can be used to understand the structure and operation of the economy.

The first half of the course covers mathematical techniques (in both the discrete and continuous domains) and the second half covers introductory statistics.

Objectives

On successful completion students should:

• be able to solve a system of two equations;
• be able to use differentiation and optimisation techniques in economic applications;
• be familiar with exponential and logarithmic functions;
• be familiar with random variables and probability distributions;
• be able to compute the first and second order moments (expectation, variance and covariance) of marginal and joint distributions including random variables.

Required Reading: Basic Mathematical Techniques

Ian Jacques, Mathematics for Economics and Business, FT Prentice Hall, 5th Edition

Lecture Schedule: Basic Mathematical Techniques

• Linear Equations; Ch 1
• Non-Linear Equations; Ch 2
• Mathematics of Finance; Ch 3
• Differentiation; Ch 4.
• Partial Differentiation; Ch 5.
• Integration ; Ch 6

Required Reading: Basic Statistical Techniques

Newbold P, Carlson & Thorne B, Statistics For Economics and Business, Pearson Prentice Hall, 6th Edition.

Lecture Schedule: Basic Statistical Techniques

• Describing Data: Numerical Ch3
• Probability Ch 4
• Discrete Random Variables and Probability Distributions Ch 5
• Continuous Random Variables and Probability Distributions Ch6.

Teaching Arrangements

During the course, there will be a weekly lecture combined with a class in which students present their solutions to that week's problem set.

Assessment

One piece of written coursework to be completed during the Christmas and is compulsory and will count 20% towards the course unit mark. In June, students will sit a three-hour formal examination based on the overall syllabus which will count for 80% of the course unit mark.