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Program Type: 
Thesis
Course Code: 
FE 603
Semester: 
Autumn
P: 
3
Lab: 
0
Credits: 
3
ECTS: 
10
Course Language: 
English
Course Objectives: 

Many optimization questions arise in economics and finance; An important example of this is when society chooses the optimum economic state (which we call the social choice problem). This course, called Optimization in Economics and Finance, expands and improves upon the usual optimization techniques. The models and methods presented in this course have broad interdisciplinary professional and academic application, such as economics, finance, and applied mathematics, including policy planning and optimal social choice, using optimal models for forecasting, market simulation, development planning, and sensitivity analysis.

Course Content: 

Overview of optimization issues; optimization problems in finance and economics, profit maximization conditions, Economic Dynamics and Integral Calculus, Expected value calculation in stochastic models, Ito's lemma, Black-Scholes derivative pricing models, Excel applications (optimization in imperfectly competitive markets)

Teaching Methods: 
1: Lecture, 2: Question-Answer, 3: Discussion, 4: Simulation, 5: Case Study
Assessment Methods: 
A: Testing, B: Experiment, C: Homework, Q: Quiz

Vertical Tabs

Course Learning Outcomes

Learning Outcomes Programme Learning Outcomes Teaching Methods Assessment Methods
Comprehending the optimal models that have been widely used in economics and finance 1,2,3,5 1,2,3 A, C
Mastering the mathematical foundations of optimal models and acquiring the calculation techniques of the models 1,2,3,5 1,2,3 A, C
To be able to understand the purposes, uses, and methodology of common optimal models 1, 5 1,2,3 A, C
Ability to calculate optimal modeling and models 1, 5 1,2,3 A, C

Course Flow

Week Topics Study Materials
1 Introduction  
2 - 3 Overview of Optimization Topics  
4 - 5 - 6  Optimization Problems in Finance and Economics  
7 Midterm Exam  
8 - 9 - 10  Economic Dynamics and Integral Calculus  
11 - 12 -13  Stochastic Models  
14  Derivative Pricing Models  
15 End of Term Studies

Recommended Sources

RECOMMENDED SOURCES
Textbook Optimization in Economics and Finance Some Advances in Non-Linear, Dynamic, Multi-Criteria and Stochastic Models, BRUCE D. CRAVEN, SARDAR M. N. ISLAM, 2005, Springer
Additional Resources Course Notes Course website, lecture notes, financial markets laboratory, financial calculator, online resources, excel type software.

Material Sharing

MATERIAL SHARING
Documents Guidelines and additional examples for Lecture Topics and Homework Assignments
Assignments Homework assignments
 
Exams Midterm Exam and Final Exam

Assessment

ASSESSMENT
IN-TERM STUDIES NUMBER PERCENTAGE
Mid-Term 1 20
Class Performance 6 20
Final Exam 1 60
  Total 100
CONTRIBUTION OF FINAL EXAMINATION TO OVERALL
GRADE
  60
CONTRIBUTION OF IN-TERM STUDIES TO OVERALL
GRADE
  40
  Total 100
 
COURSE CATEGORY Expertise/Field Courses

Course’s Contribution to Program

COURSE'S CONTRIBUTION TO PROGRAMME
No Program Learning Outcomes Contribution
1 2 3 4 5
1 To comprehend the basic principles of finance and to be able to apply these principles in national and international areas.          X
2 To use modern information technologies and current financial tools effectively.        X  
3 To comprehend the ethical rules and social responsibility understanding accepted by financial professional organizations and to apply them in the decisions to be taken.    X      
4 To have the infrastructure that will enable them to do business in multicultural, multilingual and interdisciplinary environments.      X    
5 To have information about the markets and the functioning of the markets and to analyze the developments in these markets.     X X  
6 To recognize the management tools and models specific to multinational companies and to be able to apply them where necessary.          
7  To understand the structure of the global economic system and to analyze how new developments will affect this structure.   X      
8 To be able to use the ability of critical thinking in the decision making process.    X      
9 To transfer the acquired leadership, teamwork and communication skills to the lifelong learning process.           
10 To be able to manage the process with analytical and creative approaches by anticipating the opportunities and problems that dynamic working conditions may create.           

ECTS

ECTS ALLOCATED BASED ON STUDENT WORKLOAD BY THE COURSE DESCRIPTION
Activities Quantity Duration (Hour) Total Workload (Hour)
Course Duration (Including the exam week: 15x Total
course hours/week)
16 3 48
Hours for off-the-classroom study (Pre-study, practice,
review/week)
16 4 96
Homework 5+1(Proje) 60 60
Mid-term  1 10 20
Final 1 15 30
Total Work Load     254
Total Work Load / 25 (h)     10.16
ECTS Credit of the Course     10