This course is designed to provide students with a strong foundation in all the fundamental concepts in investments. Broad topics include risk and return, constructing optimal portfolios, asset pricing models, fixed-income securities, and financial derivatives. We will seek a balance between the theoretical paradigms, the empirical findings, and their application to the real world. Lectures and exams will concentrate on both conceptual foundations and quantitative problem solving.

General characterization





Responsible teacher

Filipa Castro


Weekly - Available soon

Total - Available soon

Teaching language




Lecture notes.

"Investments", by Bodie, Kane, and Marcus, 10th edition, McGraw-Hill

Teaching method

There are four main teaching and learning methods:

  • Lecture-style classes: conceptual material is presented and illustrated with simple examples.

  • Cases: the class prepares and discusses a case on the topic of investments.

  • Problem sets: students will be given simple problem sets, mostly aimed at consolidating technical material (for example, valuing derivatives).

  • Topical issues: a recent event and/or news piece is selected for class discussion (for example: the recent contraction of the hedge-fund industry and its potential implication for market efficiency).
  • Evaluation method

    Grades will be determined using the following factors and relative weights:
    1.    Cases: 30%
    2.    Midterm:35%
    3.    Exam: 35%
    To obtain a passing grade in the course, students must have a grade in the final exam of at least 10. Students will have to deliver all the problem sets and cases to be able to complete the course.
    The midterm exam is also mandatory.

    Subject matter

    Main topics covered in the course:

  • Introduction: present values, risk and return

  • Portfolio Theory

  • Equities

  • Fixed Income

  • Linear Derivatives

  • Options