Financial Markets and Investments
Objectives
At the end of the semester students should be able to:
– Understand the organization and operation of the financial system and its economic relevance
– Know the mechanisms for admission to the market, trading systems used and the main market participants
– Distinguish the main segments in which financial markets are decomposed and the major financial instruments traded in them
– Analyze and evaluate spot market and derivative market financial securities
– Identify and calculate the sources of risk and return of financial assets
– Discuss the problem of choosing asset portfolios, the relationship between return and risk, the importance of diversification
– Understand how equilibrium prices are established and the selection of optimal portfolios under uncertainty
– Discuss the problem of efficiency in financial markets
General characterization
Code
33160
Credits
6
Responsible teacher
Jorge Bravo (IMS)
Hours
Weekly - 3
Total - 36
Teaching language
English
Prerequisites
Not Applicable
Bibliography
Teaching method
Expositional and Questioning Method, Case Study analysis; problem solving activities; active learning;
Evaluation method
Individual final exam (100%).
Subject matter
1. Markets, financial instruments and institutions: Financial System; Segmentation of financial markets; Trading of Financial Instruments: Public Offerings, Trading Systems, Participants
2. Portfolio Choice: Risk and return of an asset / portfolio; diversification; Markowitz Efficient Frontier; Decision-making under uncertainty; Selecting optimal portfolios
3. Equilibrium models in financial markets: Market Index Model; CAPM; APT theory; Efficiency of financial markets
4. Analysis and evaluation of financial investments
4.1.Bonds and other debt securities: modalities and characteristics; yield curve; pricing; measures of return / risk, rating; interest rate risk hedging and immunization strategies
4.2.Stocks: Typology, Fundamental and Technical Analysis; Discounted cash flow models; Market Multiples; Capital Increases and Evaluation of Rights
4.3.Investment Funds
4.4.Warrants
4.5.Financial derivatives