Introduction to Financial Markets

Group	Teacher	Department	Language
Year 3	Daniel Benito Sánchez	Economía, Finanzas y Contabilidad	ENG

Prerequisites

In recent years the financial system has been characterised by extreme volatility together with a rise in the level of instability in interest rate, equity, foreign exchange and commodity markets.

Financial institutions and multi-national corporations face challenges and opportunities on a daily basis and it is necessary to develop strategies to adapt to these changing business conditions.

A grasp of global financial markets and the products traded within them is vital in order to understand what these challenges and opportunities are and how they can be managed and exploited.

CONTENT

1. MACRO ANALYSIS AND MONETARY POLICY The macro environment and the diferent monetary policies are affecting permanently to the financial markets
2. FOREIGN EXCHANGE MARKETS Introduction: -Global description of financial markets, instruments and asset classes. -Relationships between economic cycle and financial markets. -Central banks and monetary policy. Foreign exchange markets: -Market structure. -Main drivers. -Spot rates. -Cross rates. -Forward rates: how to invest in currencies.
3. EQUITY MARKETS INTRO Introduction to equity markets: -Equities as an investment alternative. -Organization and structure of the stock exchange. -Issuers, investors and brokers. Types of transactions: -Primary and secondary markets. -IPO. -Takeover bids. -Splits and reverse splits.
4. EQUITY MARKETS: VALUING STOCKS Valuing equities (Fundamental Analysis): -Valuing common stocks. -Top-down and bottom-up approach. -Growth versus value stocks. -Dividend discount model and Gordon-Shapiro. -Ratios: price earnings ratio, dividend yield ratio, earnings yield gap, price to book value, ROE, ROA, etc.
5. EQUITY MARKETS: EQUITY PORTFOLIOS Equity portfolios: -Risk of stocks and equity portfolios. -Normal distribution of returns in equities. -Correlation. -Alternatives to get equity exposure: CFD, ETF, etc. Final presentation: equity portfolio.

1. MACRO ANALYSIS AND MONETARY POLICY

The macro environment and the diferent monetary policies are affecting permanently to the financial markets

2. FOREIGN EXCHANGE MARKETS

Introduction:
-Global description of financial markets, instruments and asset classes.
-Relationships between economic cycle and financial markets.
-Central banks and monetary policy.

Foreign exchange markets:
-Market structure.
-Main drivers.
-Spot rates.
-Cross rates.
-Forward rates: how to invest in currencies.

3. EQUITY MARKETS INTRO

Introduction to equity markets:
-Equities as an investment alternative.
-Organization and structure of the stock exchange.
-Issuers, investors and brokers.

Types of transactions:
-Primary and secondary markets.
-IPO.
-Takeover bids.
-Splits and reverse splits.

4. EQUITY MARKETS: VALUING STOCKS

Valuing equities (Fundamental Analysis):
-Valuing common stocks.
-Top-down and bottom-up approach.
-Growth versus value stocks.
-Dividend discount model and Gordon-Shapiro.
-Ratios: price earnings ratio, dividend yield ratio, earnings yield gap, price to book value, ROE, ROA, etc.

5. EQUITY MARKETS: EQUITY PORTFOLIOS

Equity portfolios:
-Risk of stocks and equity portfolios.
-Normal distribution of returns in equities.
-Correlation.
-Alternatives to get equity exposure: CFD, ETF, etc.

Final presentation: equity portfolio.

Methodology

The course has been designed on three levels in order to promote understanding and the implementation of the basic concepts (Interactive Learning Process).

The syllabus has therefore been designed to include:

A theoretical level: Theoretical concepts are formally presented and then applied by means of examples. In order to do so, students will be provided with materials that are used in class to develop each subject.
A self-learning level: Students will be given reading assignments on both theoretical and research contents which will provide them with in depth knowledge of the topics that are covered in class.
A relational or group level: The course makes use of the case study methodology whereby students working in groups can analyze, propose and put forward solutions to the cases they have been assigned.
FOR THE PROPER FOLLOW-UP OF THE SUBJECT IT IS NECESSARY TO BRING A CALCULATOR AND LAPTOP.

Assessment criteria

The evaluation criteria have 4 components: attendance and participation (10%), quizes (20% in total), Team work (20%) and final exam (50%).

A minimum score of 4 in final exam is required in order to calculate the subject grade considering the distribution in weights % especified above. The minimum grade to pass the course is a score of 5.

In case a retake exam is needed, the final course grade will be calculated in the same way than the ordinary exam explained above.

Timetable and sections

Group	Teacher	Department
Year 3	Daniel Benito Sánchez	Economía, Finanzas y Contabilidad

Timetable Year 3

From 2023/9/4 to 2023/10/16:
Each Monday from 8:00 to 10:30. (Except: 2023/9/11, 2023/9/25 and 2023/10/9)
Each Thursday from 14:00 to 16:30. (Except: 2023/10/12)

From 2023/10/23 to 2023/11/2:
Each Monday from 9:30 to 10:00. (Except: 2023/10/30)
Each Monday from 8:00 to 9:30. (Except: 2023/10/30)
Each Monday from 8:00 to 10:30. (Except: 2023/10/23)
Each Monday from 9:30 to 10:30. (Except: 2023/10/30)
Each Thursday from 14:00 to 16:30. (Except: 2023/10/26)

From 2023/11/13 to 2023/11/30:
Each Monday from 8:00 to 9:00. (Except: 2023/11/13 and 2023/11/27)
Monday and Wednesday from 8:00 to 10:30. (Except: 2023/11/20, 2023/11/22 and 2023/11/29)
Each Thursday from 14:00 to 16:30.

Monday2023/11/20:
From 9:00 to 9:15.
From 9:00 to 10:30.

From 2023/12/15 to 2023/12/20:
Each Wednesday from 9:15 to 12:30.
Each Wednesday from 12:30 to 13:15.
Each Friday from 17:30 to 20:30.

Thursday 2024/2/8 from 9:15 to 12:30.

Type:	OBL	Curs:	3	Period:	S semester
ECTS Credits:	6 ECTS

Introduction to Financial Markets (2235.YR.013015.1)

General information

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