Capital markets theory is about asset pricing with microeconomic foundations. The models studied in this course are the building blocks of Finance, so that a good understanding of capital markets theory is necessary for students specializing in Finance. The primary objective of this course is to introduce a variety of asset pricing models. Following this course, a student should:

• Be able to identify the limits of widely used models; understand the empirical tests of these models; be aware of potential applications.
• Master the tools necessary to read the asset pricing literature.