EXC 3670 Financial Markets and Institutions
EXC 3670 Financial Markets and Institutions
Financial markets are instrumental to the workings of the economy. However, these markets do not exist in a vacuum, but evolve from the interactions of market participants within the boundaries of market institutions. The importance of financial markets have grown over time, if measured by volume traded or the share of the total output of the economy. This and the recent financial crisis have brought into light the importance how financial markets actually work.
The objective of this course is to provide an in-depth introduction into the workings of modern financial markets. There are many different players using these markets. On one hand, corporations, governments, and other institutions use the financial markets to raise funds (issue equity and debt) for capital investments. On the other hand, these funds are provided by private and institutional investors as well as intermediaries, banks, pension, mutual funds, etc.
More specifically, the course focuses on the mechanisms by which securities are issued and traded in modern financial markets and the implications for the efficiency and liquidity of markets. It covers all major asset classes (money markets, bonds, equities, FX, and derivatives), with a special emphaisis on interaction between financial analysis and institutional characteristics.
The students will acquire a good understanding of how different financial markets work. More specifically, the students will develop understanding with respect to the following topics:
- Sources for demand and supply of capital to financial markets
- Trading of financial assets
- Participants in financial markets
- Major financial assets and institutions relevant to all households
- During the acquisition of the above mentioned knowledge the students will acquire skills that prepare them for work involving security trading, portfolio management or trade quality evaluation and for graduate work in this area.
- The acquired theoretical and practical knowledge provided by the course should enable the student to operate in actual financial markets, e.g. as a trader, a asset manager or an analyst.
- Introduction to financial markets
- The financial system
- Market participants: Governments, firms, funds, asset managers, banks, central banks, regulators, etc.
- Intertemporal consumption (Fisher model)
- Interest rates: Loanable funds equilibrium and money markets
- Financial markets: Instruments, Primary vs. Secondary markets
- Generic market structures (secondary markets)
- Market liquidity
- Financial crises
- Pension and mutual funds
The course's lecure hours will combine lectures and plenary tutorials where solutions to exercises will be explained and practical examples will be presented.
Specific Information regarding any aspect of student evaluation will be provided in class. It is the student's responsibility to obtain this information. Please note that whilst attendance is not compulsory, it is the students responsibility to obtain any information provided in class that is not included on the course homepage/itslearning or in the text book. Homepages and/or itslearning are not designed for the purpose of students who choose not to attend class. At the same time, all students are expected to familiarize themselves with all information provided through itslearning in a timely manner.
Spreadsheets (Excel) will be used for certain practical applications and examples, in paricular, during the Bloomberg sessions. It is recommended that students become familiar with Excel. In class, it will be explained how to use Excel to access the data from the Bloomberg terminal and how to analyse financial data in Excel.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course start.
At re-sit all exam components must, as a main rule, be retaken during next scheduled course.
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EXC 2910 Mathematics, EXC 2904 Statistics, EXC, 2110 Basic Financial Management, or equivalent.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Weight: 20 Grouping: Individual Duration: 1 Week(s) Exam code: EXC36701 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Weight: 10 Grouping: Individual Duration: 1 Week(s) Exam code: EXC36701 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 70 Grouping: Individual Support materials:
Duration: 3 Hour(s) Exam code: EXC36701 Grading scale: Point scale leading to ECTS letter grade Resit: All components must, as a main rule, be retaken during next scheduled course |
| Activity | Duration | Comment |
|---|---|---|
Teaching | 45 Hour(s) | Lectures included Bloomberg sessions. |
Prepare for teaching | 80 Hour(s) | |
Group work / Assignments | 30 Hour(s) | |
Student's own work with learning resources | 45 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.