Lecture notes on FINANCIAL MARKETS

Introduction In 2000, when Bocconi University launched its Master in Quantitative Finance, I was asked to develop a course touching upon the many aspects of decision theory, financial economics, and microstructure that could not otherwise fit in the tight schedule of the program. Reflecting this heterogeneity, the course was dubbed " Topics in Economics " and I was given a fair amount of leeway in its development. My only constraint was that I had to choose what I thought best and then compress it in 15 lectures. These notes detail my choices after two years of teaching " Topics in Economics " at the Master in Quantitative Finance of Bocconi University and a similar class more aptly named " Microeconomics of financial markets " at the Master of Economics and Finance of the Venice International University. The material is arranged into 15 units, upon whose contents I make no claim of originality. Each unit corresponds to a 90-minutes session. Some units (most notably, Unit 5) contain too much stuff, reflecting either the accretion of different choices or my desire to offer a more complete view. Unit 7 requires less time than the standard session: I usually take advantage of the time left to begin exploring Unit 8. I have constantly kept revising my choices (and my notes), and I will most likely do so in the future as well, posting updates on my website at http://helios.unive.it/˜licalzi.