Course 2025-2026 a.y.

In order to address these questions in a systematic way, the course comprises four main parts. 

Part I: understand the relevance of discount rates and the implications for corporate investment decisions

Part II: familiarize with key properties in the bond and equity market

Part III: familiarize with key properties of risk management 

Part IV: familiarize with key concepts about exchange rates and global financial markets

All of these topics will be addressed focusing not only on the EU markets, but also on other big economic and financial areas (US, UK, EMs). Participants will be able to form an informed outlook on financial markets. We will follow current events on major financial markets and discuss their potential implications for our investment / corporate finance decisions.

Most importantly, we will link our analytical tools to readings and news so that we can learn one of the most important skills required in finance: distil essential and relevant insights. Nowadays, the abundance of information and media platforms available online is a double-edge sword as it is both a blessing and a source of complexity. Our course provides students with essential tools to ‘avoid major mistakes’ when forecasting financial markets.   

Across all of these topics, we will refer to ESG-related topics. We will talk about ‘green financing’, ‘emission allowance pricing’, ‘environmental risk management’. We will talk about ‘green coins’, i.e., blockchain based currencies backed by green assets. In addition, we will talk about Blue Assets, i.e., economic activities related to the Blue Economy, namely activities taking place in bodies of water (sea, ocean, lakes, …). 

The course aims at providing students with important concepts commonly adopted in investment and corporate finance. Students will learn to interpret financial trends, investment challenges and opportunities from a global financial and economic perspective. 

As for specific objectives, upon completion of this course, you will be able to:

1. Read articles in the financial press critically by connecting them to global scenarios and individual firms’ decisions.

2. Understand financial concepts such as cost of equity and cost of debt.

3. Understand the characteristics of investment portfolios in equities, bonds, and other financial instruments. 

4. Relate rates, global financial conditions, and capital budgeting concepts (NPV, IRR, Payback period).

5. Understand the role of maturity/duration when looking at investment portfolios, yield curves, and projects.

6. Start to familiarize yourself with risk management and derivative products (including foreign currencies)

7. Adopt econometric methods used in empirical finance.

• Apply econometric techniques to study returns both in the time-series and in the cross section.
• Be able to critically interpret economic and financial news/current events. 

• Lectures
• Practical Exercises
• Individual works / Assignments

The main inputs provided to the students are references, slides, notes, draft Python codes and exercises designed to provide challenges that stimulate learning. The empirical applications are based on databases freely available on the web.

The final grade of all students will be a weighted average of:
-- homeworks (they will count for 20%) ;
-- in-class quiz (provided in the middle of the semester);
and
-- final exam.
Students will be expected to go over an In-class Quiz in the middle of the semester. This quiz may count for 20% of the final grade if the student performs better in the quiz than in the final
exam. Otherwise, I just give zero weight to the quiz and shift this 20% to the final exam. The final exam counts for 60%--or 80% if the performance in the final is better than in the quiz. This scoring scheme gives a lot of insurance to students (Have a bad day on the day of the quiz? No worries, perform better in the final and I will discard your Quiz with poor results).

This computation of the grade applies to students taking the exam in May or June. In all other cases, the final grade will depend solely on the performance in the final exam.

There is no difference between attending and non-attending students concerning both teaching methods and expectations. All relevant materials and homeworks are delivered online through Bboard. All homeworks can be submitted online. Hence non-attending students can deliver their HWs as attending students. Their final grade will be a weighted average of both their homeworks (20% weight) and their final exam (80% weight). This computation of the grade applies to students taking the exam in May or June. In all other cases, the final grade will depend solely on the performance in the final exam (100% weight). Hence, a non-attending student who takes my exam in May or June without having delivered the homeworks has a final score computed as: 20%*0 +80%*exam performance. A non-attending student taking the exam after these dates get 100%*exam performance.

• The main recommended (but not required) text used for the course is Bodie, Kane, and Marcus, Investments, 13th Edition. The online version is available via the library.
• We will also use J. COCHRANE, "Asset pricing. Revised Edition". (only 2 chapters)
• Lecture slides will be posted on Blackboard.
• Supplemental readings, cases, articles, codes, spreadsheerts will be posted on Blackbaord.