The course aims to provide the theoretical and empirical knowledge needed to understand the characteristics and the dynamics of capital markets. Furthermore, the course aims to give students the instruments to understand and to evaluate the return and the risk of financial instruments as a single asset class and as a combination in a portfolio. Finally, the notion of market structure and efficient markets is analysed.
At the end of the course, the students will able to understand: the value of financial instruments making also reference to the calculation of their return and risks; the concept of portfolio diversification and portfolio management strategies; the idea of efficient markets.
Knowledge of accounting, financial mathematics and statistics are recommended.
Compulsory prerequisites required (Propedeuticità) are published on the web site: https://lt-ea.unibg.it/it/node/122
The course includes both frontal lectures, consisting of theoretical lectures and empirical exercises concerning cases analysed by lecturer and students, and possible speeches by field experts.
Together with traditional lectures where students will be constantly encourage to raise questions and new topics for discussion, we make use and reference to financial newspapers, journal, papers, website and other relevant tools for financial information.
Attending and non attending students have a single written exam which consists of theoretical and numerical questions. The exam may last approximately 120 minute and consists of two parts: 3 open-ended questions (15 points) and multiple choice answer (both theoretical and empirical ones).
The exam aims at assessing the overall preparation of students, both as regards the institutional and fundamental aspects of investment process and instruments, and in relation to their applicative and empirical implementation to concrete cases.
Through the written test, students will firstly have to demonstrate their knowledge and familiarity with the topics and the fundamental issues discussed during lectures, with special attention also to the practical exercise part.
The course is divided into various topics related to each other in a sequential way. Each block of topics is in turn organized in some points
I PART: Price, return and risk
- The idea and the mechanisms behind price, return and risk calculation;
- Price, return and risk for bonds;
- Price, return and risk for stocks;
- The term structure of interest rates;
- The efficient frontier and portfolio construction.
II PART: Bond and Stock Portfolio management
- Benchmark construction and uses;
- benchmarking or Indexing;
- Active Strategies;
- immunization;
- Return Maximisation;
- Ex-post performance measurement.
III PART: Structure and efficiency of capital markets
- The definition of financial market efficiency;
- Financial Markets structure.
IV PART: Derivatives Instruments (notes)
Last focus on:
Digital finance
Sustainable finance
While emphasizing the importance of attendance for effective learning, there is no difference between attending and non-attending students.
