Financial Economics Whilst many undergraduate finance textbooks are largely descriptive in nature the economic analysis in most graduate texts is too advanced for final year undergraduates. This book bridges the gap between these two extremes, offering a textbook that studies economic activ- ity in financial markets, focusing on how consumers determine future consumption and on the role of financial securities. Areas covered in the book include: • An examination of the role of finance in the economy using basic economic principles, eventually progressing to introductory graduate analysis. • A microeconomic study of capital asset pricing when there is risk, inflation ...