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Financial Economics

Financial Economics

Code	16301
Year	1
Semester	S2
ECTS Credits	6
Workload	TP(30H)
Scientific area	Economics
Entry requirements	N.A.
Learning outcomes	- To enable students to apply economic theory to assess how time, risk (uncertainty), opportunity cost and information can create incentives or disincentives for a decision in financial markets. - To enable students to use models of economic behaviour in financial markets. - To provide students with an understanding of how financial markets work. - To encourage the development of the necessary analytical skills in financial economics.
Syllabus	1. Financial markets: micro and macro realities 1.1 Market Efficiency 1.2 Determination of prices 1.3 Forecast in financial markets 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 Monetary policy and financial markets 2.5 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 4. New theories in finance and economics 4.1 The behavioral and experimental field: recent applications to financial markets 4.2 Financial equilibrium with differential information
Main Bibliography	Danthine, J.-P., Donaldson, J.B., 2014. Intermediate Financial Theory, 3rd Edition, Academic Press LeRoy, S.F., Werner, J., 2014. Principles of Financial Economics, 2nd Edition, Cambridge University Press Ceccheti, S., Schoenholtz, K., 2015. Money, Banking and Financial Markets, 4th edition, McGrawHill/Irwin. Damodaran, A., 2012. Investment Valuation, 3rd Edition, Wiley and Sons. Hull, J.C., 2011. Options, Futures and Other Derivative Securities, 8th edition, Prentice-Hall. Kettell, B., 2002. Economics for Financial Markets: A volume in Quantitative Finance, ISBN: 978-0-7506-5384-8; http://www.sciencedirect.com/science/book/9780750653848 Viney, C., Phillips, P., 2012. Financial Institutions, Instruments and Markets, McGrawHill.
Teaching Methodologies and Assessment Criteria	The teaching-learning process combines classroom learning, theoretical-practical classes and independent, individual and group study. Classes combine the transmission of knowledge with empirical references, practical questions and discussion of scientific articles. Classes emphasise interactive teaching-learning dynamics. The continuous assessment consists of a written test and a final group work with presentation, each of which is worth 50% of the final grade. In order to sit the final examination, the student must obtain a final mark of 6 or above.
Language	Portuguese. Tutorial support is available in English.