Investment, Finance and Asset Prices

Course content for the masters course Investment, Finance and Asset Prices [ECON 5068], AY2025

Timetable:

• Wednesdays, 3-5PM, Humanity Lecture Theatre, Gilbert Scott Building
• Thursdays, 1-3PM, Carnegie Lecture Theatre, Joseph Black Building

Group Assignment

• Question Sheet. Due 11 November 2025, 12:00 Midday

Slides

• s1 - User Cost Model
• s2 - Lagrangians and Tobin Model
• s3 - Dynamic Programming Part 1
• s3 - Dynamic Programming Part 2
• s4 - Testing Q theory
• [s5 - Financial Constraints and Investment]
• [s6 - Fixed Costs and Irreversibility]
• [s7 - Uncertainty and Inaction]
• sX - High Rollers Game

Tutorials

• T1 - Unceraity and Risk Aversion
• T1.S - Solutions
• T2 - Tobin Model
• T2.S - Solutions
• [T3 - Eating a Cake]

Labs and Codes

• L1.code - Intro to Matlab
• L2 - Newton’s Method / Rootfinders
• L2.code - Newton’s Method / Rootfinders
• L3 - Value Function Iteration. (VFI)
• L3.code - Value Function Iteration. (VFI)
• H.code - High Rollers with backward induction

Maths Toolkit

• slides

Media

• Sky News: AI infra boom
• The Economist: “The murky economics of the data-centre investment boom”
• The Economist: “Big tech’s capex splurge may be irrationally exuberant”
• Derek Thompson Podcast: “This Is How the AI Bubble Could Burst”