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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 - Understand the decision of an investor to invest in risk assets and free risk assets;
- Understand the operation of capital markets;
- Learning to estimate the fundamental value of bonds and shares;
- Determine the optimal set of portfolios available to an investor;
- Determine the profitability of a financial asset;
- Estimate the fundamental value of bonds and shares, and evaluate the credit risk and interest rate of a bond.
- Assess financial derivative contracts
Syllabus 1. Portfolio theory
2. Capital markets equilibrium models
3. Stock valuation
4. Bond valuation
5. Financial derivatives valuation
Main Bibliography Main
Bodie, Z., Kane, A., and Marcus, A. (2023), Investments, 13th Edition, McGraw-Hill International Editions.
Bodie, Z., Merton, R., and Cleeton, D. (2012), Financial Economics, 2nd Edition, Prentice Hall.
Sharpe, W., Alexander, G., and Bailey, J.V. (2015), Investments, 7th Edition, Pearson.
Hull, J. (2021). Options, Futures, and Other Derivatives, 11th Edition. Pearson.
Martellini, L., Priaulet, P., and Priaulet, S. (2001), Fixed-Income Securities: Dynamic Methods for Interest Rate Risk Pricing and Hedging. John Wiley & Sons.

Supplementary
Various scientific articles to be made available on Moodle
Teaching Methodologies and Assessment Criteria The final grade for the course is determined by two types of assignment: An individual seminar based on the syllabus, worth 40%, and an end-of-semester individual assignment, worth 60%. The latter is split into 15% for a mini-pitch presenting the research question, and 45% for the final submission and presentation.
All assignments are presented and discussed in class to foster debate and discussion.
A passing grade is only awarded for an overall grade of 9.5 or higher.
Language Portuguese. Tutorial support is available in English.

Course

Economics
Last updated on: 2024-06-14

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