BFC-M-01: Capital Market Theory

Winter Term 2025/2026

The module provides a solid introduction to modern capital market theory and is aimed at Master's students with a focus on finance. It begins with a review of key fundamentals in finance, including the time value of money, discounting techniques, and the functioning of bond markets. Building on this foundation, the module covers core concepts of capital market theory, particularly modern portfolio theory, asset pricing models such as the Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT), as well as the efficient market hypothesis. A central theoretical concept introduced is the stochastic discount factor, which offers a unified and flexible framework for the valuation of financial instruments. In addition to the theoretical foundation, special emphasis is placed on the practical application of these concepts in security valuation and portfolio optimization. The aim of the module is to develop a deep understanding of the mechanisms and models of modern capital markets and to demonstrate their relevance for financial decision-making.

Course and exam language: German

The corresponding bibliography and further information on the course can be found in the course catalogue ("Modulhandbuch", German only).

Course material as well as a detailed course syllabus will be provided on the Virtual Campus. The access code will be communicated in the course of the first lecture and may be requested by email.

Registration and deregistration for the exam online through FlexNow! during the official registration period of the Faculty for Social Sciences, Economics, and Business Administration.