Universitat Internacional de Catalunya

Financial Economics & Capital Markets

Financial Economics & Capital Markets
6
14561
3
Second semester
op
Main language of instruction: English

Other languages of instruction: Catalan, Spanish,

Teaching staff


Dr. ABDI, Yaghoub - yabdi@uic.es

Tutorials should be requested by email: yabdi@uic.es

Introduction

The first part of the course is an introduction to asset allocation which will enable the student to understand the concept of assets and resources with economic value and to master the science of methodology and procedures in a better investment decision-making process. Asset allocation involves dividing your investments among different assets, such as stocks, bonds, and cash. The asset allocation decision is a personal one. The allocation that works best for you changes at different times in your life, depending on how long you have to invest and your ability to tolerate risk. The topic is very important because it has a major impact on whether you will meet your financial goal. If you don't include enough risk in your portfolio, your investments may not earn a large enough return to meet your goal. After mastering in assets and securities, topics related to efficiency of capital markets, cost of capital will be covered.

Pre-course requirements

All students interested in Financial Economics and Capital Markets must first complete introductory courses in corporate financial management.

Objectives

  • To understand the fundamental principles of asset allocation and risk concepts and to master the technical and financial tools.
  • To familiarize with financial systems and everything related: banks, loans, investments, savings, etc. Both disciplines open the doors to well-paid and in-demand jobs. 
  • To employs economic theory to evaluate how time, risk, opportunity costs, and information can create incentives or disincentives for a particular decision.
  • To study and analyze the operating and efficiency of capital markets.
  • To understand the concept of cost of capital and be able to evaluate it in its application.

  •  To understand the determinants of capital structure and especially modern portfolio theorize.

Syllabus

• Chapter 1. The Asset Allocation Decision: Asset Allocation, Security Selection, and Market Timing. The Risk-Adjusted Return
• Chapter 2. Investing Globally: Risk and Diversification
• Chapter 3. Types of Financial Markets & Types of Securities
• Chapter 4. The efficiency of Capital Markets.
• Chapter 5. The Modern Portfolio Theory. Introduction
• Chapter 6. An Introduction to Asset Pricing Models. CAPM
• Chapter 7. Fundamental Analysis and Share Valuation. G-S Discount Model. CF Discount
• Chapter 8. Bonds, Bond Pricing, and Yield to Maturity
• Chapter 9. Yield Curve, Zero-Coupon Bonds, and the Spot Rate Treasury Curve

Teaching and learning activities

In person



The course consists of theoretical sessions in which the concepts necessary for the fulfillment of the course objectives will be presented. These sessions will be complemented with practical sessions spanning most of the time in the classroom.

It is particularly important that students do the necessary work before class so that they can participate actively. Students should be able to participate in a discussion forum about the interpretation of the results. 

Training activities:

  • Magister class.
  • Classroom practice (solving problems/videos/text comments/essays).
  • Class quizzes.
  • Group report presentations.

Evaluation systems and criteria

In person



Continuous Evaluation:

• Presentation: 20%
• Team project: 20%
• Final exam: 60%


Presentation
A student may join a team of 3-4 students. Students may form their own groups by sending an Email to the professor confirming the group members. The presentation topic will be given by the professor and the date of the presentation will be discussed in the class. (Please bear in mind that you should always check and verify the dates by course calendar on Moodle in case of updates or changes.).

Team project

A student may join a team of students (which can be different from the presentation team with confirmation through Email to the instructor regarding the team members). Team members will work together as a group of asset and market analysts. Students are encouraged to utilize various research resources, such as the Wall Street Journal, Financial Times, Reuters.com, Bloomberg.com, Econoday.com, etc. The instructor will announce a guide for the written report and the deadline for this Project Report.

Final exam

The final exam is a closed-book exam and will cover material from lectures, assigned readings, and problem sets. You are allowed to bring a calculator to the final exam. Absence from final exam will not be excused except for the most serious reasons. Such serious circumstances must be validated in writing by an appropriately accredited professional (i.e., medical doctor).

Bibliography and resources

“Investment Analysis and Portfolio Management”. Reilly & Brown. 10th Ed. Cengage