Financial Markets (ECON702_EBAAY)

This course provides a detailed overview of financial markets by focusing on different financial instruments and market participants that are involved in trading. We will explore mainly traditional investments (e.g., equities, bonds) and, if time permits, capital budgeting (optimal choice of investment projects) from the perspective of firms. The course also covers the issues related to market efficiency, valuation of financial securities and behavioral finance.

Along with classroom learning, students will be organized to participate in an investment game to gain hands-on experience in investing and trading in real markets. This simulation game also aims to further consolidate our understanding of various notions and theories about financial markets.

 Fundamentals of accounting and finance

Topic 1 : Course overview, introduction to financial markets

Topic 2 : Interest rates, debt securities and debt markets

Topic 3 : Equities and equity markets

Topic 4 : Risk, diversification and optimal portfolio

Topic 5 : Derivatives (if time permits) 

Security valuation and basics of financial investment

·         Corporate Finance, global edition, by Jonathan Berk and Peter DeMarzo; Pearson 2018.

·         Financial Markets and Institutions, global edition, by Frederic S. Mishkin and Stanley G. Eakins; Pearson 2018.