A78618 Financial investment & pricing

At the end of the course the student will be able:

• Identify and select among different types of fixed income securities in light of their  characteristics
• Price fixed income securities based on market and trading practice
• Calculate the term structure of interest rates and the resulting market expectations on future interest rates dynamics
• Perform valuations of equity shares and calculate the value of rights in case of a share capital increase
• Manage an investment portfolio including equities, fixed income securities, FX positions and commodities.

At the end of the course the student will be able:

• Identify and select among different types of fixed income securities in light of their  characteristics
• Price fixed income securities based on market and trading practice
• Calculate the term structure of interest rates and the resulting market expectations on future interest rates dynamics
• Perform valuations of equity shares and calculate the value of rights in case of a share capital increase
• Manage an investment portfolio including equities, fixed income securities, FX positions and commodities.
• Manage the portfolio within risk and diversification constrains

The corse aims to provide the student with a theoretical and practical background in the field of securities instruments and related markets. It provides a description of the characteristics of the main financial instruments clarifying their risk return profile and the mechanics of the markets where they are traded. It also offers a preview of portfolio theory and asset pricing discussing how investors build their investment portfolios and how the main types of securities are priced. The course is intended for students who want to become a money manager, an investment professional or who just want to be a wise investor. Within a rigorous analytical framework, the course offers plenty of real world examples and favors the “hands on” approach.

The course will run under a mix of formal lectures, in class exercises, real life cases, a workshops related to the portfolio simulation and an optional Experiential Learning Lab.

At the beginning of the course the students will be divided in working teams and will be assigned a virtual amount of money to be invested in a predefined set of securities and other financial instruments. On a weekly basis the teams may decide to reallocate their portfolio with the view to maximize the final return. The students might to attend an Experiential Learning Lab focused on bond portfolio simulation.

Students are expected to read the assigned material in advance before coming to class and actively participate in the class discussion. Part of the lecture will be spent in reviewing the teams investment decisions: the teams are expected to motivate and support their decisions in light of market events and new information.

Students are responsible for consulting on a regular basis the website of the course on “my.liuc.it” where updates, additional material and slides about the course are posted.

Prerequisites: financial mathematics, basic statistics. 

Students attending classes will have to sit a midterm written exam and a final exam. Other points can be obtained with home assignment or experiential learning Lab.

For all other students the grade is based on a final written exam covering all subjects dealt by the course.