Financial Markets and Corporate Finance (GEST802_EMBS)

Upon completion of the module, students will

• Be able to understand how the main asset classes (cash, bonds, equities …) may be used for Investment management (programme ILO K1)
• Be able to understand how economic variables like growth and inflation impact financial markets and the performance of the various asset classes (programme ILO K2)
• Know how central banks policies – both conventional and unconventional – impact financial markets (programme ILO A1)
• Be able to understand why currencies should be treated as a separate asset class in the asset allocation process and currency valuation and hedging should be dealt (programme ILO BW1)
• Master the various techniques used to hedge investment risk of the major asset classes (programme ILO BW1)
• Know how to value the equity market in absolute terms and relative to the bond market (programme ILO S1)
• Know the main tools used to measure company and sector valuation (programme ILO K2)

Financial Markets

1)            Characteristics of the main asset classes (cash, bonds, equities, commodities, alternative investments, currencies)

2)            Measure economic growth and detail the various tools used to predict future economic activity

3)            Analyse the impact of economic growth on the main asset classes

4)            Detail the various measures of inflation (headline, core, cost-push, demand pull)

5)            Analyse the impact the growth-inflation mix on the major asset classes

6)            Central bank policies – both conventional and unconventional – and their impact on financial markets

Corporate Finance

1) Equity Valuation

2) Combining top-down and bottom-up analysis for optimum investment management

Upon completion of the module, students will

• Be able to understand how the main asset classes (cash, bonds, equities …) may be used for Investment management (programme ILO K1)
• Be able to understand how economic variables like growth and inflation impact financial markets and the performance of the various asset classes (programme ILO K2)
• Know how central banks policies – both conventional and unconventional – impact financial markets (programme ILO A1)
• Be able to understand why currencies should be treated as a separate asset class in the asset allocation process and currency valuation and hedging should be dealt (programme ILO BW1)
• Master the various techniques used to hedge investment risk of the major asset classes (programme ILO BW1)
• Know how to value the equity market in absolute terms and relative to the bond market (programme ILO S1)

Know the main tools used to measure company and sector valuation (programme ILO K2)

• Baumohl Bernard, The secrets of Economic Indicators, Pearson Education, 2015
• Bodie, Z., Kane, A., and Marcus, A.J. Investments, McGraw-Hill, 2014.
• Brealey R.A., Myers S.C., Allen F., Principles of corporate finance, 2014.
• Elton, E.J. Gruber, M.J., Brown, S.J. and Goetzmann, W.N. (2006) Modern Portfolio theory and Investment Analysis, Wiley.
• Mishkin F., Monetary policy strategy, MIT Press, 2007