75755 - Financial instruments and financial markets

Learning outcomes

The course will provide an extensive treatment on the theoretical and practical functioning of modern financial markets. After a general introduction, we will cover the main theoretical models in financial economics and portfolio theory (arbitrage theory, capital asset pricing, the efficient market hypothesis and the recent developments in behavioral finance). Then we move the analysis of debt and equity markets, along with derivative assets. Finally, we will extensively focus on active investment management strategies, dealing with portfolio performance evaluations, globalization of financial markets and hedge funds.

At the end of the course, students are expected to be fully familiar with technical analysis of financial markets and the detailed functioning of main financial instruments.

Course contents

The course consists of five topics:

1. INTRODUCTION TO FINANCIAL MARKETS

2. MODERN PORTFOLIO THEORY

3. DEBT AND EQUITY MARKETS

4. DERIVATIVE ASSETS

5. ACTIVE INVESTMENT MANAGEMENT

Topics 1, 2, 3 will be covered in the first module (3^rd subcycle)

Topics 4 and 5 will be covered in the second module (4^th subcycle)

Readings/Bibliography

The reference textbook is: “Essentials of Investments”, by Body, Kane and Marcus – Tenth Edition.

Teaching methods

Class teaching with students’ active participation. Case studies and “hands-on” activities by students.

Assessment methods

The exam will be structured as follows:

1. two essay-type questions (10 pt each)

2. one analytical exercise resembling a real-word situation (10 pt)

Teaching tools

Traditional plus analysis with spreadsheets and financial software

Office hours

See the website of Luigi Marattin

See the website of Valentina Colombo