The grade is based on a portfolio consisting of class participation (approximately 15%), a paper discussion (approximately 40%), a final project (approximately 40%), and a reflection note (approximately 5%). One grade is given for the entire portfolio.
Class participation is assessed during the first part of the course when the basic empirical asset pricing literature will be presented. The assessment of class participation will reflect the quality of a student's comments and insights, as well as the intensity of participation. It tests whether students correctly understand the fundamentals of cross-sectional asset pricing.
Next, students have to discuss a research paper which involves summarizing and critically discussing a research paper. This is an important next step in become a successful researcher in empirical asset pricing. The students will receive feedback on whether they have correctly identified a paper's incremental contribution, its strengths and weaknesses and how to overcome or mitigate potential shortcomings. Feedback on this part of the assessment prepares students to write good referee reports for journal.
The final project is the ultimate step in the whole learning process and consists of replicating an empirical asset pricing paper and the presentation of the results. This allows testing whether the students fully and correctly understand the details of a particular research paper. This is an important step towards writing their own research papers and to learn how to successfully present the results.
Finally, the students have to write a reflection note where they are supposed to reflect on their learning and development during the course.