UNIVERSITY OF TORONTO

RSM332: Capital Market Theory

Comprehensive Study and Exam Preparation Guide 2026

Part 01: About This Guide

Part 02: Practice Examination Paper

Part 03: Detailed Solutions and Explanations

Part 04: Proven Exam Strategies and Tips

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University of Toronto - Capital Market Theory (RSM332)

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ACADEMIC YEAR 2026 - 2027

University	University of Toronto
Program	Rotman Commerce
Course Code	RSM332
Course Name	Capital Market Theory
Notes Title	Comprehensive Study and Exam Prep Guide
Page Length	28

Get ready for the RSM332: Capital Market Theory final exam at U of T with this complete guide, featuring exam-style questions and tips to avoid common mistakes. You will get with a clear picture of how the final exam will be assessed, and how it is structured, as well as the likely style and range of questions that you could see in the real exam. The purpose of this guide is to provide a logical structure for the topics that make up the course, to emphasize and explain the important concepts and methods in each topic, and to provide initial examples to which the concepts and methods are applied.

This course, Capital Market Theory (RSM332) examines financial markets, focusing on key concepts in derivatives, equity, and fixed income markets. The course emphasizes the creation of optimal portfolios, the risk-return trade-off, and equips students with essential quantitative skills for financial decision-making. Practical applications and theoretical frameworks are combined to connect capital market concepts to real-world settings.

Main topics include derivatives such as futures, forwards, and options, along with pricing techniques like the binomial model, Black-Scholes formula, and put-call parity. Modern Portfolio Theory, the Capital Asset Pricing Model (CAPM), Efficient Market Hypothesis (EMH), and arbitrage pricing theory (APT) are introduced, along with stock valuation techniques and the study of market anomalies. In fixed income modules, students explore bond valuation, spot rates, yields, the term structure of interest rates, and advanced topics such as duration, mortgages, corporate bonds, and credit risk.

To enroll, students must have completed RSM230. The course has an exclusion for students who have taken ACT349 or ECO358. Additionally, it requires ECO204 or ECO206 as a co-requisite.

COURSE CODE	COURSE NAME
ACT240	Mathematics of Investment & Credit
ECO101	Principles of Microeconomics
ECO102	Principles of Macroeconomics
ECO206	Microeconomic Theory
ECO220	Introduction to Data Analysis & Applied Econometrics
ECO227	Foundations of Econometrics
ECO372	Data Analysis & Applied Econometrics in Practice
ECO374	Forecasting and Time Series Econometrics
ECO375	Applied Econometrics I
EEB225	Biostatistics for Biological Sciences
MGM390	Business Law
PSY201	Statistics I
RSM219	Introduction to Financial Accounting
RSM220	Intermediate Financial Accounting I
RSM221	Intermediate Financial Accounting II
RSM222	Management Accounting I
RSM225	Legal Environment of Business I
RSM230	Financial Markets
RSM250	Principles of Marketing
RSM260	Organizational Behaviour
RSM332	Capital Market Theory
RSM333	Corporate Finance
RSM336	Investments
RSM433	Advanced Corporate Finance
RSM435	Futures and Options Markets
SOC202	Introduction to Quantitative Methods in Sociology
STA220	The Practice of Statistics I

MITCA

Updated for 2026

University of Toronto - Capital Market Theory (RSM332)

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