Finance I: Introduction to Finance and Financial Markets - Prof. Montllor, Apuntes de Administración de Empresas

¡Descarga Finance I: Introduction to Finance and Financial Markets - Prof. Montllor y más Apuntes en PDF de Administración de Empresas solo en Docsity! 1 Faculty of Economics and Business Department of Business FINANCE I (102329) 2015-2016 Group 4 Lecturers: Joan Montllor & Maria-Antonia Tarrazon Requirements Finance I expects students to fulfil standard requirements for the third course of the degree. Students registered in this subject are expected to count with those skills acquired during previous courses. Goals and context This subject introduces students to the financial foundations for the degrees to which it belongs. Students will learn to think in financial terms and to identify similarities and differences between financial and real economic analyses. The course is centred upon the distinctive features of financial markets as well as upon value creation from the twofold perspective of markets and firms. Topics will be studied from the perspective of the two dimensions of finance: time and risk. Topics 1 Asset classes and valuation principles 1.1 Primitive and derivative assets 1.2 Basic financial operations: Investment, speculation, hedging and arbitrage 1.3 Capitalization and discounting 1.4 The twofold dimension of finance: Time and risk 2 Financial markets and their role in asset pricing 2.1 Concept and functions of the financial market. Primary market and secondary market 2.2 Functioning of stock exchanges and fixed income markets 2.3 Functioning of derivative markets 2.4 Introduction to hedging with derivatives 3 Diversification and portfolio selection 3.1 Return and risk of common stocks 3.2 Return and risk of equity portfolios 3.3 Diversification and risk reduction 3.4 The Markowitz portfolio selection model 4 The Capital Asset Pricing Model (CAPM): Implications for asset valuation 4.1 Introducing the risk-free interest rate in portfolio selection: The Separation Theorem 4.2 The market portfolio and the Capital Market Line 4.3 The Security Market Line 4.4 Systematic risk versus specific risk: Properties and consequences on required return 2 5 Efficiency on financial markets 5.1 Concept and properties of efficient capital markets 5.2 Anomalies and noise 5.3 Bubbles and financial crises 5.4 Financial markets regulation 5.5 Ethics on financial markets 6 Pricing financial assets: Common shares and bonds 6.1 Required rate of return and risk premia 6.2 Bond pricing 6.3 Common shares valuation: Earnings and dividends 6.4 Common shares valuation: Growth opportunities 7 Introduction to option and futures pricing 7.1 Call and put options 7.2 The put-call parity 7.3 Binomial pricing: The synthetic portfolio 7.4 Introduction to futures pricing Methodology 50% of credits are theoretical and 50% practical. Theory is taught through lectures. Lecturers will introduce the topics encouraging students’ participation through questions and observations. In each topic presentation of contents will be accompanied by the analysis of the methods applied. The practical part consists of problem solving (with and without software), analysis of corporate and financial market information, and selected readings. Students are expected to participate actively by solving exercises and analysing published information, especially financial websites of stock exchanges, bond and derivatives markets as well as corporations. Problem solving in the classroom insists in the usage of specific software (especially spreadsheets). Evaluation The evaluation of Finance I consists of two components: a) Continuous evaluation (40% of the grade) b) Final exam (60% of the grade). According to the regulation of the Faculty of Economics and Business the continuous evaluation consists of written exams. Lecturers can also decide to incorporate additional questions for upgrading in the last (60%) exam. The final grade is calculated as the weighted average of the mark on the continuous evaluation (40%) and the mark on the final exam (60%). To pass the subject students need an average grade higher than or equal to 5 (over 10). Re-evaluation of the subject consists of a retake exam and is subject to the following rules of the Faculty of Economics and Business of the UAB.