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

Responsible teacher

Jorge Bravo (IMS)

Hours

Weekly - 3

Total - 36

Teaching language

English

Prerequisites

Not Applicable

Bibliography

MAIN

Bodie, Z., Kane, A. and Marcus, A. (2017). Investments, 11th Edition. McGraw-Hill.

Hull, J. (2016). Fundamentals of Futures and Options Markets (9th Edition). Prentice Hall

AUXILIARY

BVLP (2001), Investir em Bolsa: Funcionamento e Instrumentos do Mercados à Vista, IMC

Cuthbertson, K. e Nitzsche, D. (2007), Investments, Spot and Derivative Markets, Wiley.

Damodaran Aswath (2012), Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, 3rd Edition.

Elton, E. e Gruber, M. (2014), Modern Portfolio Theory and Investment Analysis, 9th Edition, John Wiley & Sons, New York.

Mota, P. R., Alves, C., Fernandes, A. e Rocha, M. (2015). Mercados, Produtos e Valorimetria de Ativos Financeiros, 2ª Edição, Almedina.

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

Programs

Programs where the course is taught:

Master's in Law and Financial Markets