Financial Markets


Content, progress and pedagogy of the module

The module is focusing on portfolio selection and pricing models for financial assets, including Markowitz’ Nobel Prize-winning Portfolio Theory, methods of stock pricing such as CAPM and the APT model, the Nobel Prize-winning Black-Scholes-Merton option pricing model, and the Binomial Model. Furthermore, the module comprises introductory bond pricing (effective interest rates and the term structure of interest rates).

The module consists of lectures and exercises. The lectures consist of theoretical discussions and discussions about common applications and cases. During the exercises the students will be exposed to practical problems, which they shall solve by applying the theories introduced in the lectures.

Learning objectives


The objective is that the student after the module possesses the necessary knowledge on:

  • the theory behind mean-variance optimisation and CAPM, and an insight into the empirical evidence for the CAPM.
  • how to explain what the Arbitrage Pricing Theory (APT) Formula means and the empirical results regarding APT.
  • how to explain the main ideas behind the Binomial Model.


The objective is that the student after the module possesses the necessary skills in:

  • implementing mean-variance optimisation, CAPM, and APT.
  • applying the binomial model and the Black-Scholes-Merton option pricing model.
  • applying fundamental bond-pricing results.


The objective is that the student after the module possesses the necessary competences in:

  • independently working with exercises and implementing the financial models from the module in Excel, Matlab, R, or other software.
  • independently analysing financial markets and instruments in an intuitive manner, based on methods and concepts from the curriculum.

Type of instruction

For further information see §17.



Name of examFinancial Markets
Type of exam
Written or oral exam
AssessmentPassed/Not Passed
Type of gradingInternal examination
Criteria of assessmentThe criteria of assessment are stated in the Examination Policies and Procedures

Facts about the module

Danish titleFinansielle markeder
Module codeBAØKO202325
Module typeCourse
Duration1 semester
Language of instructionEnglish
Location of the lectureCampus Aalborg
Responsible for the module


Education ownerBachelor of Science (BSc) in Economics
Study BoardStudy Board of Economics (cand.oecon)
DepartmentAalborg University Business School
FacultyFaculty of Social Sciences and Humanities