The course will be offered in the classroom. Further information and downloads will be made available on Moodle.

1. Introduction: finance basics
   Time value of money, compounding, measuring return, discount rates, dividend discount model, expected utility
    
2. The stochastic discount factor
   Using the stochastic discount factor approach to understand returns on risky and risk-free assets
    
3. Factor pricing models
   The CAPM and the empirical evidence, Fama-French-3-factors
    
4. Aggregate stock price behavior
   Equity premium puzzle, time series predictability
    
5. Rationality and Behavioral Finance
   Bubbles, Prospect Theory

• John Cochrane: Asset Pricing, 2005, revised edition, in particular: chapters 1 (not 1.5), 9 (only 9.1), 12 (only 12.3), 20, 21 (21.1). The 1st edition will do but check out the typo list for the 1st edition on Cochrane's homepage.
• Papers from the reading list, which you will find in the slides.