31516 - Financial Economics

Learning outcomes

The purpose of this course is to give a practical understanding of financial risks and of contracts and methods for managing these risks under normal as well as stressful market conditions, such as those that we have experienced in recent years. Students will be able to manage market risk, credit risk and sovereign risk with a number of quantitative techniques. Research seminars are also included, dealing with new issues in financial markets, i.e. how financial innovation, the increasingly “systemic” nature of risk, and regulatory changes have made risk management more challenging. A few empirical puzzles and policy issues will be addressed. A special session will be devoted to applications in the tourism industry.

Course contents

The main topic concerns the functioning of international financial markets. We study financial risks and contracts and some methods for managing these risks. In particular, we focus on market risk, credit risk and sovereign risk. Research seminars are also included, dealing with new issues in financial markets, i.e. how financial innovation, the increasingly “systemic” nature of risk, and regulatory changes have made risk management more challenging. A special session will be devoted to some applications in the tourism industry.

Readings/Bibliography

Mishkin, Eakins "Financial Markets and Institutions", 9/e, Pearson, 2018 (chs. 2,3,4,5,6,7,8,12,13,15,16,23, 24)

Further specialized articles and other didactic material will be made available before each lecture.

It will be available in the web site "Materiale Didattico"

Teaching methods

Lectures and classes.

Lab classes will complement the lectures, so that students will be able to work with financial data at the end of the course

Assessment methods

Written exam.

The assessment method is based on the evaluation of a written test for the individual preparation. Students are expected to answer fifteen questions, including multiple-choice, true-false, short numerical exercises and short answers. A mock exam as a sample will be provided at least one month before end of lectures. Students are expected to know the basic quantitative methods discussed during lectures and to critically discern the limitations of the models employed in the analysis.

Teaching tools

Slides, specialized articles and other didactic material will be made available before each lecture.

Office hours

See the website of Elettra Agliardi