Financial Economics

Financial economics is a branch of economics that analyzes the distribution and use of resources in markets in which decisions are made under uncertainty. Financial decisions must often take into account future events, whether those are related to individual stocks, portfolios, or the market as a whole. The subject is concerned with the allocation and deployment of economic resources, both spatially and across time, in an uncertain environment. It therefore centres on decision-making under uncertainty in the context of financial markets. It is built on the foundations of microeconomics and decision theory. This book provides a comprehensive description of the theory and functioning of financial economics (or economics of finance). It is spread over 28 chapters which have been organized into 5 theme parts.