Syllabus
Money and Monetary Institutions the evolution of money and its functions, money aggregates, the role of money in the short versus long run, time value of money
Financial Markets, Financial Institutions, Banks and Banking comparison of real and financial assets, agents and clients of financial markets, the evolution of financial markets, market structure, ongoing trends (globalization, securitization, financial engineering, regulation, and liberalization) the role and evolution of banks, regulation of banks, the role and function of central banks, adverse selection and moral hazard in a lender-borrower relationship
Financial Engineering and Financial instruments introduction of money markets, bond markets, equity securities, stock and bond market indexes, derivative markets, exchange-traded markets, over-the-counter markets, forward and future contracts, options, and arbitrage
Fixed Income Securities bond characteristics, bond pricing, bond yields, yield curve, yield curve and future interest rates, interest rate structure
Options and Futures value of options, option strategies, option valuation, future contracts, trading mechanisms in futures contracts, future market strategies
Security analysis macroeconomic and industry analysis, intrinsic value versus market price, financial statement analysis
Portfolio Choice and Portfolio Management interest rates, risk and risk premium, real versus nominal risk, risk and risk aversion, systematic versus intrinsic risk, portfolio risk, optimal portfolio, portfolio diversification, mean-variance analysis, capital asset pricing models(CAPM), portfolio performance valuation, international diversification, the process of portfolio management
Efficient Markets vs Behavioral Finance efficient market hypotheses, empirical challenges to efficient market hypotheses, the role of psychology in behavioral finance
Bank Crisis and International Financial System causes of the current global banking crisis, shadow banks and the financial crisis of 2007-2008, the role of government in sustainable banking, foreign exchange markets and exchange rate regimes, international money and capital markets, growing interdependence of financial markets, sources of financial risks
Annotation
The course will cover the foundations of financial markets, money markets, and banks and their role in the economy and country financial stability, lessons from and responses to the current financial crisis.