A78618 Financial investment & pricing

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

• Understand the benefit of diversification and risk reward relationship
• Understand Portfolio theory
• Evaluate different types of fixed income securities in light of their characteristics
• Price fixed income securities based on market and trading practice
• Calculate the duration of a bond
• Perform valuations of equity shares and calculate the value of rights in case of a share capital increase
• Understand why and how options and futures are used and priced
• Achieve a good understanding of financial markets

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

• Understand the benefit of diversification and risk reward relationship
• Understand Portfolio theory
• Evaluate different types of fixed income securities in light of their characteristics
• Price fixed income securities based on market and trading practice
• Calculate the duration of a bond
• Perform valuations of equity shares and calculate the value of rights in case of a share capital increase
• Understand why and how options and futures are used and priced
• Achieve a good understanding of financial markets

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 students will simulate the management of a bond and equity portfolio during the semester. The students will choose one between 3 real market situations (a bond, an IPO and a equity corporate action) their personal/group project.

The course will run under a mix of formal lectures, in class exercises and real life cases. Students are expected to take part into the portfolio management game. Students are expected to investigate in depth one special situation (real case)

Students are expected to read the assigned material in advance before coming to class and actively participate in the class discussion.

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.

Pre-requisites: students must have passed all the following exams (or their equivalent): financial system, financial mathematics, statistics. 

For Students attending classes (MAX 3 absences during the course), grades will be determined by a mix of participation in the portfolio simulation game (30%), pop up tests (10%), class participation and real life case (30%) and final written exam (30%).

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