ECON 364
Theory of Asset Pricing Spring 2025
Division II Quantitative/Formal Reasoning

What is the price of time? What is the price of risk? How do markets allocate resources across time and uncertain states of the world? This course theoretically studies how markets allocate scarce resource across time and when outcomes are risky. The “goods” in such markets are called “assets” and the prices of “assets” determine the cost of trading resources across time and across uncertain states of the world. We theoretically investigate how equilibrium determines the price of time, then asset price implications; then asset allocations and prices in the presence of risk; finally, implications for new assets.