Financial Investments
Objectives
A.
Knowledge and Understanding:
1.
Have a broad knowledge of different investment assets and strategies
2.
Understand the risk-return trade-off of alternative strategies
3.
Understand the concept and implications of market efficiency
B.
Subject-Specific Skills:
1.
Construct a mean-variance efficient portfolio
2.
Estimate and apply asset pricing models
C.
General Skills
1.
Improve analytical thinking
2.
Use IT tools available to managers
3.
Financial theories and markets
General characterization
Code
14504
Credits
3
Responsible teacher
João Pedro Pereira
Hours
Weekly - Available soon
Total - Available soon
Teaching language
Portuguese | English
Prerequisites
Available soon
Bibliography
•
Bodie, Kane, and Marcus, “Investments”, McGraw-Hill, 2018. Denoted as BKM in this document.
• A
set of handouts will be distributed in class.?
Teaching method
T. Teaching Methods. The course will follow a standard lecture mode,
where we will:
1.
Discuss the theory of each topic.
2.
Solve small applied problems.
L.
Learning Methods. The recommend learning methods are:
1.
Reviewing the content of the lectures and related bibliography.
2.
Solving larger take-home projects.
Evaluation method
The assessment of this CU is done together with
the block of CU of the same area of knowledge. This assessment has 3 moments,
which together define the final grade of the curricular unit:
•Individual exam with a weighting of 50% of the
total mark
•Group work with a weighting of 35% of the total
grade value
•Individual reflection-action exercise carried
out at the end of the curricular unit, with a weighting of 15% of the total
grade value. The set of individual action-reflection exercises is a journaling
activity, which will constitute, at the end, a learning portfolio capable of
synthesising the contributions of the Executive Master for that student.
Subject matter
1. Markets and securities
Main topics:
i. Asset classes &financial instruments
ii. How securities are traded
iii. Mutual Funds & other investment
companies
2. Portfolio choice
Main topics:
i. Risk and return
ii. Risk aversion and capital allocation
iii. Optimal risky portfolios
3. The Capital Asset Pricing Model
Main topics:
i. Efficient frontier
ii. Expected returns on individual securities
iii. Application to security valuation
4. Arbitrage Pricing Theory and Factor Models
Main topics:
i. Market model
ii. Fama and French 3 factor model
iii. Application to fund performance evaluation
5. Bond Markets
Main topics:
i. Bond prices and yields
ii. Spot and forward rates
iii. Bond management
6. The Efficient Market Hypothesis
Main topics:
i. Empirical evidence on the EMH
ii. Implications for investor