08881 - Investments

Learning outcomes

The purpose of the course is to give students theoretical knowledge and skills related with the financial investments answering to the following questions:

• How is the financial instruments' value affected, and how is possible to evaluate them?
• What are the most frequently models in practice? Are they coherent with the modern financial theory?
• How are financial instruments traded on financial markets?

To answer to these questions, we'll present most frequently used evaluation models and how thet are used by financial analysts. To explain the functioning of the financial markets, we'll refer to financial web sites and trading on-line.

This course will also provide to the students a technical language, so they will be able to interact with international students and operators.

The purpose of this course will be achieved at the end of itself if students will be able to understand, also in a critical perspective, the main facts about the financial markets.

Course contents

The course is intended to analyze securities and their evaluation, such as their issue and their trading on financial markets. During the first part of the course, after a brief overview on the technical-economical and fiscal characteristics of such financial assets, we'll discuss on the treasury and corporate bonds' evaluation. In the second part, we'll discuss shares evaluation, using Discounted Cash Flow Model and multiples and their application to the listed firms' studies, and derivatives evaluation (arbitrage and option pricing theory). In the last part of the course, we'll analyze the functioning of the Italian financial markets and the behaviour of intermediaries operating in such markets.

Readings/Bibliography

Reference Textbook is:

Cenni S. e Ferretti R., Economia dei mercati e degli strumenti finanziari, seconda edizione, Giappichelli, Torino, 2006.

For other general investigation, students can refer to:

Anolli M., Elementi di economia del mercato mobiliare, Il Mulino, Bologna, 2001.

Caparrelli F., Economia del mercato mobiliare, Milano, McGraw-Hill, 2004.

Fabrizi P.L. (a cura di), L'economia del mercato mobiliare, Milano, Egea, 2004.

On quantitative methods and evaluation models see:

Benninga S., Modelli finanziari: la finanza con Excel, Milano, McGraw-Hill, 2001.

Cherubini U. e Della Lunga G., Il rischio finanziario, Milano, McGraw-Hill, 2001.

Cherubini U. e Della Lunga G., Matematica finanziaria: applicazioni con Visual basic per Excel, Milano, McGraw-Hill, 2002.

Damodaran A., Valutazione delle aziende, Apogeo, Milano, 2002.

Marchesoni M.A., Novellini V. e Tramontana L., Analisi fondamentale, Il Sole 24 Ore, Milano, 2001.

On derivatives see:

Hull J. (2005), Fondamenti di mercati di futures e opzioni , V ed. Pearson Education Italia.

Teaching methods

This course will analyse covered topics from a operational financial perspective. This means not simply “practical”, rather the application of the theoretical framework to the real problems.

Assessment methods

Valuation is based on a written exam. The exam is to be made sequentially, following this structure: in the first part (maximum mark: 15/30, length: 30 minutes) is made up of 15 multiple choices questions (3 options, only 1 of these is correct; correct answer is evaluated 1, wrong or missing answer is evaluated 0). The second part (minimum mark: 18/30, length: 90 minutes) is made up of 2 exercises (minimum mark: 12/30) and some short questions based on a article taken from a financial magazine (maximum mark: 6/30). Maximum mark is 33, that correspond to 30 with laud.

The overall exam length is 120 minutes. It is possible to use financial calculator during the exam.

The recording of the marks has to be made through telematic system only.

Teaching tools

Students can find additional course material, handouts and lecture slides on the following website: http://www.universibo.unibo.it.

Office hours

See the website of Stefano Cenni