Undergraduate Studies
Academic Year 2025-26
Financial Theory
Files and Links
- Course Outline .pdf (Greek)
- Course Outline .pdf (English)
- Full Description @courses.xrh
- Link to e-class
6th Semester
ΧΡΘΕΡ01
Course id
7,5
ECTS
Compulsory. Background for all courses in Finance
Course type
Students will become familiar with the foundations of Financial Theory. This is a compulsory course that covers topics such as expected utility theory, portfolio choice under uncertainty, Markowitz theory, the foundations and use of the Capital Asset Pricing Model, and Arbitrage Pricing Theory. Emphasis is placed on the theoretical foundations.
- Search for, analysis and synthesis of data and information, with the use of the necessary technology
- Adapting to new situations
- Decision-making
- Working independently
- Team work
- Working in an international environment
- Working in an interdisciplinary environment
- Production of new research ideas
Five Sections:
- Expected Utility (axioms of investor’s behavior under uncertainty, definition of risk aversion, risk premium, certainty equivalent, Pratt-Arrow risk premium, standard utility functions)
- Portfolio Choice (general setting, Arrow’s theorems)
- Markowitz Theory (portfolio statistics, portfolio frontier, minimum variance frontier, efficient frontier, two fund separation theorem, optimal portfolio)
- Capital Asset Pricing Model (assumptions, derivation, applications)
- Arbitrage Pricing Theory (assumption, derivation, zero beta portfolios)
