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AI2153 Financial Economics with Real Estate Applications 7.5 credits

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Headings with content from the Course syllabus AI2153 (Autumn 2021–) are denoted with an asterisk ( )

Content and learning outcomes

Course contents

Mortgage loans, commercial property loans, bonds, fixed and fixed interest rates, interest rate derivatives, financial leverage, credit risks, interest rate risks, capitalization rates and property yields, real estate valuation, investment analysis, net operating income, property before tax cash flows, risk analysis, securitization, real options, land valuation, REITs and listed property shares, optimal portfolio theory, multi-asset portfolios with real estate and other assets.

Intended learning outcomes

Upon completion of the course, students will be able to

  • analyze and compare risk and return characteristics for different real estate financing solutions, both from borrower's and lender's perspectives,

  • apply different investment analysis methods to analyze direct and indirect real estate investment alternatives,

  • calculate optimal asset allocations with real estate as one of several asset classes in a portfolio,

  • give examples of how actors in the real estate and financial markets work to develop solutions that can lead to sustainable economic, environmental and social development.

Course disposition

No information inserted

Literature and preparations

Specific prerequisites

Knowledge in financial economics equivalent to the content in the course AI2152.

Recommended prerequisites

No information inserted


No information inserted


Information about course literature is presented in the course PM.

Examination and completion

If the course is discontinued, students may request to be examined during the following two academic years.

Grading scale

A, B, C, D, E, FX, F


  • INL1 - Assignment, 3.0 credits, grading scale: P, F
  • TEN1 - Written Exam, 4.5 credits, grading scale: A, B, C, D, E, FX, F

Based on recommendation from KTH’s coordinator for disabilities, the examiner will decide how to adapt an examination for students with documented disability.

The examiner may apply another examination format when re-examining individual students.

Opportunity to complete the requirements via supplementary examination

No information inserted

Opportunity to raise an approved grade via renewed examination

No information inserted


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Ethical approach

  • All members of a group are responsible for the group's work.
  • In any assessment, every student shall honestly disclose any help received and sources used.
  • In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.

Further information

Course web

Further information about the course can be found on the Course web at the link below. Information on the Course web will later be moved to this site.

Course web AI2153

Offered by

ABE/Real Estate Economics and Finance

Main field of study

Built Environment

Education cycle

Second cycle

Add-on studies

No information inserted


Han-Suck Song,