Abstract
This first chapter provides an overview on financial economics and how to study it: you will learn how we have designed this textbook and how you can use it efficiently; we will give you an overview of the essence of financial economics and some of its central ideas; we will finally summarize how research in financial economics is done, what methods are used and how they interact with each other.
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Notes
- 1.
Steve Ross, the founder of the econometric Arbitrage Pricing Theory (APT ), for example, claims that “every financial disaster begins with a theory!” By saying this, he means that those who start trading based on a theory are less likely to react to disturbing facts because they are typically in love with their ideas. Falsification of their beloved theory is certainly not their goal!
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G. Soros, The Crisis of Global Capitalism: Open Society Endangered, Public Affairs, 1998.
R.H. Thaler, Advances in Behavioral Finance, Russell Sage Foundation Publications, 1993.
—————, What Use is Economic Theory?, Dept. of Economics, University of Michigan, 1993.
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Hens, T., Rieger, M.O. (2016). Introduction. In: Financial Economics. Springer Texts in Business and Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-49688-6_1
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DOI: https://doi.org/10.1007/978-3-662-49688-6_1
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