Financial Investments


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 4) Construct a mean variance efficient portfolio 5)
Estimate and apply asset pricing models.

General characterization





Responsible teacher

João Pedro dos Santos Sousa Pereira


Weekly - Available soon

Total - Available soon

Teaching language





Bodie, Kane, and Marcus, “Investments”, McGraw Hill, 2014 (10th edition).

Teaching method

The course will follow a standard lecture format, with both theoretical exposition and problem solving exercises.

Evaluation method

There will
be regular homework problems, mostly based on end of chapter problems on the topics covered in class. Furthermore, there
will be a few take home larger cases, to investigate more deeply some specific topics. Students will be invited to present and
discuss their results in class.

Subject matter

1.Markets and securities i. Asset classes and financial instruments ii. How securities are traded iii. Mutual Funds and other
investment companies 2. Portfolio choice i. Risk and return ii. Risk aversion and capital allocation iii. Optimal risky
portfolios 3. The Capital Asset Pricing Model i. Capital Market Line ii. Security Market Line iii. Application to security
valuation 4. Arbitrage Pricing Theory and Factor Models i. Market model ii. Fama and French 3 factor model iii. Application to
fund performance evaluation 5. The Efficient Market Hypothesis i. Empirical evidence on the EMH ii. Implications for
investors 6. Bond Markets i. Bond prices and yields ii. Term structure of interest rates iii. Bond management 7. Futures
Markets i. Speculation and hedging strategies ii. Futures prices of stock indices iii. Investment strategies with stock index


Programs where the course is taught: