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Financial Economics

Code 14184
Year 1
Semester S2
ECTS Credits 7,5
Workload OT(3H)/TP(30H)
Scientific area Economics
Entry requirements PhD Students who attend the course need to have previous knowledge of macroeconomics, microeconomics, econometrics, calculous, algebra, and financial and asset markets. The course requires intensive reading with real applications to financial markets.
Learning outcomes i) Apply economic theory to assess how the time, risk (uncertainty), opportunity costs and information can create incentives or disincentives for a particular decision on the financial markets.
ii) Using models of economic behavior in financial markets.
iii) Use knowledge of the functioning of financial markets.
iv) Develop the necessary analytical knowledge about financial economics.
v) To understand the influence of informational efficiency of financial markets.
vi) Develop soft skills between microeconomics and macroeconomics and national and international financial markets.
vii) At the end of the course students should know the different methods discussed and models and have the ability to interpret and critically evaluate empirical studies in the field of financial economics, as well as being able to use these same methods and models to carry out their own research.
Syllabus 1. Financial markets: micro and macro realities
1.1 Market Efficiency
1.2 Determination of prices
1.3 Forecast in financial markets
1.4 Contagion, microstructure of markets, reflexivity
1.5 Risk aversion and investment decisions
1.6 CAPM, CCAPM, Arrow-Debreu, APT
2. Interaction between financial markets: national and international perspective
2.1 Bond markets, Foreign exchange markets, Commodity markets
2.2 Choosing optimal investment portfolios (utility theory in financial markets); Portfolio management in the long run
2.3 Derivative Markets and investment funds
2.4 The interaction between the real economy and financial markets: macro-economic activity and financial markets
2.5 Monetary policy and financial markets
2.6 The banking sector and financial markets
3. Choose the optimal capital structure and dividend policy
3.1 The mix of sources of capital and cost of funding sources
3.2 Empirical determinants in the choice of capital structure
3.3 Theories of optimal dividend policy
Main Bibliography 1. Class notes and practical cases based over existent literature applications and real practical cases (exercises worksheets)
2. Oriented lectures of scientific articles (papers); Proposed case studies
3. Several scientific articles to be made available in elearning
4. Danthine, J.-P., Donaldson, J.B., 2014. Intermediate Financial Theory, 3rd Edition, Academic Press, ISBN :9780123865496.
5. LeRoy, S.F., Werner, J., 2014. Principles of Financial Economics, 2nd Edition, Cambridge University Press.
6. John Y. Campbell (2018). Financial Decisions and Markets: A Course in Asset Pricing. ISBN: 9780691160801, Pages: 480; Princeton and Oxford: Princeton University Press

Language Portuguese. Tutorial support is available in English.
Last updated on: 2020-07-02

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