Asset Pricing Models from Coursera

The course covers several advanced topics in asset pricing, trading-off risks and return, and portfolio optimization. More precisely, students will first analyze two relevant extensions of the Capital Asset Pricing Model (CAPM) and learn how to determine the corresponding equilibrium in financial markets.

Next, they will learn how to estimate empirically the risk-return relationship predicted by the Capital Asset Pricing Model. Students will also analyze two pricing models alternative to the CAPM.

In the Arbitrage Pricing Theory, they will learn how to determine assets expected returns based on multiple risk factors and absence of arbitrage opportunities.

In the Consumption Capital Asset Pricing Model, instead, they will learn how to solve the investors' joint consumption/investment decision problem and how to compute the equilibrium asset prices and expected returns in a dynamic pure exchange economy.

Finally, the course concludes with a focus on the pricing of fixed income instruments.

What's inside

Syllabus

Week 1 - Capital Asset Pricing Model (CAPM) Extensions

By the end of this week you will learn: how to determine the equilibrium in financial markets under two distinct scenarios within the Capital Asset Pricing Model framework. First, you'll explore equilibrium determination when there is an absence of a riskless security. Second, you'll delve into the complexities of equilibrium determination when investors' preferences are dynamic, and stock returns follow a normal distribution.

Week 2 - Testing the Capital Asset Pricing Model (CAPM)

By the end of this week you will learn how to estimate empirically the risk-return relationship predicted by the Capital Asset Pricing Model

Week 3 - The Arbitrage Pricing Theory (APT)

By the end of this week you will learn how to determine assets expected returns based on multiple risk factors and absence of arbitrage opportunities

Week 4 - The Consumption Capital Asset Pricing Model (CCAPM)

By the end of this week, you will acquire a comprehensive understanding of determining equilibrium in a collaborative exchange economy, where agents make joint decisions on consumption and financial asset investment. Additionally, you will learn how to compute equilibrium asset prices and expected returns.

Week 5 - Bond Pricing

By the end of this week, you will gain a comprehensive knowledge of fixed income securities, including an understanding of their diverse characteristics, and the ability to assess their pricing and implied returns

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Complex topics include CAPM (Capital Asset Pricing Model) extensions, Arbitrage Pricing Theory (APT), and Consumption Capital Asset Pricing Model (CCAPM)

Instructors Giovanni Walter Puopolo are pioneers in asset pricing

Emphasizes the relationship between risks and return, crucial for financial decision-making

Provides empirical methods for testing the Capital Asset Pricing Model (CAPM)

Delves into advanced topics like the Consumption Capital Asset Pricing Model (CCAPM), catering to experienced learners

Course requires a strong foundation in finance and mathematics

Career center

Learners who complete Asset Pricing Models will develop knowledge and skills that may be useful to these careers:

Financial Analyst

To maximize profit and achieve financial goals, Financial Analysts must be able to understand complex pricing models. Asset Pricing Models is a perfectly suited course to build a foundation for success in this role. By the end of the course, analysts will have learned different advanced topics in asset pricing, trading-off risks and returns, and portfolio optimization. The course also covers Arbitrage Pricing Theory, Consumption Capital Asset Pricing Model, and bond pricing. This course can help you get a foot in the door as a Financial Analyst or help you become a more effective contributor to your current team.

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Portfolio Manager

The Asset Pricing Models course provides a perfect foundation to Portfolio Managers, who rely on a deep understanding of asset pricing models to make informed investment decisions. The course covers several advanced topics in asset pricing, trading-off risks and return, and portfolio optimization. It will also help you learn to determine assets expected returns based on multiple risk factors and absence of arbitrage opportunities.

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Risk Manager

An understanding of asset pricing models is a must for Risk Managers to succeed in their roles. This course will help you build a strong foundation in this area. The course covers several advanced topics in asset pricing, trading-off risks and return, and portfolio optimization.

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Investment Banker

Investment Bankers use their knowledge of asset pricing models to help clients make sound financial decisions. By taking this course, you can gain a competitive edge in the field. The course covers several advanced topics in asset pricing, trading-off risks and return, and portfolio optimization.

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Quantitative Analyst

For Quantitative Analysts, the Asset Pricing Models course is essential. The course provides in-depth knowledge of advanced topics in asset pricing, trading-off risks and return, and portfolio optimization.

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Financial Planner

Financial Planners can benefit greatly from the Asset Pricing Models course. This course helps develop the skills needed to make sound financial plans for clients, including an understanding of asset pricing models and portfolio optimization.

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Actuary

Actuaries may find the Asset Pricing Models course helpful. The course will provide you with a better understanding of asset pricing models and portfolio optimization.

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Economist

Economists may find the Asset Pricing Models course helpful. The course will help you build a foundation in asset pricing models, trading-off risks and return, and portfolio optimization.

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Data Scientist

Data Scientists may find the Asset Pricing Models course helpful, as it will provide a better understanding of asset pricing models and portfolio optimization.

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Consultant

Consultants may find the Asset Pricing Models course helpful in their work.

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Professor

Professors may find the Asset Pricing Models course helpful in their research and teaching.

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Researcher

Researchers may find the Asset Pricing Models course helpful in their work.

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