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ISCTE-IUL  >  Education  >  LE , LFC , LGM

Financial Economics (1 º Sem 2016/2017)

Code: 00222
Acronym: 00222
Level: 1st Cycle
Basic: No
Teaching Language(s): English, Portuguese
Friendly languages:
Be English-friendly or any other language-friendly means that UC is taught in a language but can either of the following conditions:
1. There are support materials in English / other language;
2. There are exercises, tests and exams in English / other language;
3. There is a possibility to present written or oral work in English / other language.
1 6.0 0.0 h/sem 36.0 h/sem 0.0 h/sem 0.0 h/sem 0.0 h/sem 0.0 h/sem 1.0 h/sem 37.0 h/sem 113.0 h/sem 0.0 h/sem 150.0 h/sem
Since year 2016/2017
Pre-requisites Macroeconomics I and II, Microeconomics I and Monetary Economics
Objectives Introduce students to the study of financial economics; explaining how investors make decisions, financial markets work, and the price of assets is determined.
Program 1. Portfolio Theory:

a. The problem of portfolio selection

b. Efficient frontier and investor's decision

2. Equilibrium models of the capital markets:

c. CAPM - Capital Asset Pricing Model

d. Index Models

e. APT - Arbitrage Pricing Theory

f. Market efficiency

3. Fixed-income securities:

a. Credit risk

b. Managing bond portfolios

4. Shares valuation:

a. The use of ratios

b. The method of discounted dividends and the PER

5.Recent Trends in financial markets
Evaluation Method The assessment uses the types of exams ('frequência' and 'exames') and evaluation dates ('1.ª e 2ª épocas') in ISCTE's evaluation regulations. In '1.ª Época', the student can choose between:
- Continuous evaluation: mid-term exam (35%), team work (20%) and final test (45%). To participate in the continuous evaluation, the student needs to have a rate of attendance to classes equal or larger than 80%.
- Final exam (100%)
In '2ª Época' the grade is the one obtained in the final exam.
Teaching Method The module use the following teaching methods:
1. Lectures to present the theoretical frameworks.
2. Tutorials, with analysis and resolution of exercises
3. Tutorials, with analysis, discussion and reading of textbooks and papers
4. Active related with team work
5. Self-study related to the student's independent work, as set out in the planning of classes.
Basic Bibliographic Bodie, Z., Kane, A., Marcus, A. (2010), Investments, 9th Edition, Mc-GrawHill/Irwin

Bodie, Z., Merton, R., e Cleeton, D. (2008), Financial Economics, 2th Edition, Prentice-Hall.
Complementar Bibliographic ECB (2011), Monetary Policy of the ECB, ECB

Crotty, J. (2009), "Structural causes of the global financial crisis: a critical assessment of the 'new financial architecture", Cambridge Journal of Economics, 33, 563-580.

Damodaran, A. (2012), Investment Valuation: tools and techniques for determining the value of any asset, 3th edition, John Wiley & Sons.

Elton, E., Gruber, M., Brown, S., e Goetzmann, W. (2009), Modern Portfolio Theory and Investment Analysis, 8th edition, John Wiley and Sons.

Foo, Check-Teck, (2008), "Conceptual lessons on financial strategy following the US sub-prime crisis", The Journal of Risk Finance, 9(3), pp. 292-302.

Gameiro, I. M., Ribeiro, N. G. (2007), "Custo de financiamento das empresas portuguesas", Boletim Económico do Banco de Portugal, Outono.

Haugen, R (2000), Modern Investment Theory, 5th edition, Prentice Hall International Editions.

Howells, P., e Bain, K. (2007), Financial markets and Institutions, 5th Edition, Pearson.

Koller, T., Goedhart, M., Wessels, D (2010), Valuation (Measuring and Managing the Value of Companies), 5th Edition, McKinsey&Co.

Leão, E., Leão, P., Lagoa, S. (2011), Política Monetária e Mercados Financeiros, 2ª edição, Edições Sílabo.

Reinhart, C. M., Rogoff, K. S. (2011), "From financial crash to debt crisis", American Economic Review, 101(5): 1676-1706.

Sharpe, W, e Alexander, G. (1998), Investments, Sixth Edition, Prentice-Hall International Editions.