98663 - Corporate Finance and Financial Markets (8 CFU)

Learning outcomes

The aim of the course is to provide students with the tools necessary to analyze (i) the investment and financing decisions in all different phases of a firm’s life cycle and (ii) the characteristics, role, and functioning of financial systems to understand their developments in the short and long runs.

At the end of the course, the student will be able to: (i) Assess real investment opportunities; (ii) Evaluate Primary Financing Sources; (iii) Understand Financial Markets and Instruments; (iv) Understand Financial Intermediaries.

Course contents

Part 1

Preliminary Concepts

1. Time value of money
2. Expected return and risk

Economic System and Financial System

1. Definitions and key components
2. Functions of the financial system

Financial Instruments

1. Definitions and economic classification
2. Bonds
3. Equities
4. Derivative instruments
5. Asset management products
6. Insurance and pension instruments

Financial Markets

1. Definitions and functions
2. Market efficiency
3. Classification of financial markets
4. Classification of securities markets

Part 2

Households and Portfolio Allocation Decisions

1. Portfolio allocation
2. Equilibrium models in financial markets

Firms: Investment and Financing Decisions

1. Financial manager and corporate governance
2. Investment decisions
3. Financing decisions
4. Extraordinary corporate transactions

Financial Intermediaries

1. Definitions and economic rationale
2. Credit intermediaries
3. Securities intermediaries
4. Insurance and pension intermediaries

Readings/Bibliography

Lecture Notes

The lecture notes, along with examples of past exams and a FAQ list, will be available on the platform “virtuale.unibo.it [https://virtuale.unibo.it] ”. There are no recommended preparatory readings.

Recommended Book

• R. Brealey, S. Myers, F. Allen, S. Sandri, Principi di Finanza Aziendale, McGraw Hill Libri Italia, 2020. Chapters 1, 2, 6, 7, 8, 9, 15, 16, 17, 18 (ISBN: 8838695717 · 9788838695711).
• L. Nadotti, C. Porzio, D. Previati, Economia degli Intermediari Finanziari, McGraw Hill Libri Italia, 2017. Chapters 1, 2, 4, 5, 6, 7, 8 (ISBN: 978-88-386-1551-1).
• D.G. Luenberger, Finanza e investimenti, Maggioli Editore, 2011 (ISBN: 8838786365).

Teaching methods

The program will be presented in class through a combination of theoretical and practical sessions. While attendance is not mandatory, it is highly recommended to enhance understanding and engagement.

Because the exam takes place in a laboratory, students must complete Modules 1 and 2 of the online safety training before attending this course:

Studentesse e studenti - Formazione generale e specifica — Salute e sicurezza - Università di Bologna — Tutela e promozione

Assessment methods

Valuation is based on a written exam.

Partial Exam

• Content: 16 multiple-choice questions, worth a total of 32 points.
• Duration: 40 minutes.
• Requirement: A minimum score of 14 points is needed to qualify for the second partial exam.

Total Exam

• Content: 32 multiple-choice questions, with 16 questions from each module.
• Duration: 80 minutes.

Each correct answer awards 2 points. There is no penalty for incorrect answers, and each question has only one correct answer. Each module accounts for 50% of the total score.

The exam aims to verify the achievement of the following objectives

• Evaluating real investments.
• Evaluating primary financing sources.
• Understanding the functioning of markets and the main financial instruments.
• Understanding the role of leading financial intermediaries.

Grading Scale

• Minimum Grade: 18
• Maximum Grade: 30L
• 18-23: Sufficient preparation and analytical skills on a limited number of topics covered in the course.
• 24-27: Adequate preparation and analytical skills, with some limitations; good operational skills, though not particularly articulated.
• 28-30: Very good knowledge of a large number of topics covered in the course; strong operational and critical skills.
• 30L: Excellent and exhaustive knowledge of the topics covered in the course; exceptional critical analysis and ability to make connections.

Teaching tools

Projector and black board, spreadsheets, tablet.

Office hours

See the website of Pierpaolo Pattitoni