This course module focuses on understanding the markets in which various financial instruments are traded, the factors that influence the return and risk characteristics of these instruments (both individually and in portfolio choices), and the role played by the leading financial institutions. By the end of the course, Students will be able to: [i] apply relevant concepts to financial markets and institutions, such as the flow of funds, interest rates, and interest rate differentials, in the context of current events or topical issues; [ii] determine and analyze appropriate risk and return measures for various financial instruments; [iii] understand the mechanics and regulation of financial securities exchanges and calculate the value of stocks, bonds, and securities; [iv] evaluate the impact of symmetric versus asymmetric information on the financial system’s structure and operation; [v] assess empirical evidence of market performance and compare it with market theories; [vi] research and analyze specific problems related to financial markets and institutions; and [vii] explain the economic rationale behind different financial instruments and markets, while also identifying threats to financial stability based on case studies of previous financial crises.
Lectures introduce the underlying theory, while empirical applications through econometric software enable students to apply the techniques introduced and test their understanding of how and why specific strategies and the misuse of financial instruments may lead to financial instability.
The final assessment (for both attending and non-attending Students) will be composed of: [i] 40% applied assignments related to a set of predetermined current financial market issues; and [ii] a 60% written exam at the end of the semester, comprising both exercises and open-ended questions.
This is an overview of the topics covered during the course:
