Introducción a los Mercados Financieros

Grupo	Profesor	Departamento	Idioma
Year 1	Daniel Benito Sánchez	Economía, Finanzas y Contabilidad	ENG

Contribución de la asignatura al programa

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

Contenidos

1. The macro picture Relationships between economic cycle and financial markets Indicators: leading, lagging and coincident. Offer, demand and sentiment Asset allocation using macroeconomic forecast Central bank and monetary policy: how interest rates are set (interbank market) ECB, FED, BOE: hawkish and dovish central bankers
2. Fixed income market Money Market Instruments: Treasury bills, boring but safe instruments Yield curve: spot and forward rates Government Bonds: Treasury Notes and Bonds; yield spreads Other type of bonds: emerging markets, junk bonds, high yield bonds Introduction to valuation: bond yield (bullet bonds)
3. Foreign exchange market FX market structure: market conventions (how to read the FX market?) Spot rates: cross currency arbitrage Bid and ask Hedging the currency risk with forwards (export and import)
4. Equity Market World equity markets structure: the stock exchange Market organization: brokers, dealers, issuers and investors Equity indices: long, short, price value and total return Market operations: IPO, takeover bid, split, capital increase Introduction to fundamental analysis: top-down, bottom-up Investment styles: value, growth and blended Introduction to fundamental analysis: key ratios (PE, Relative PE, PBV, DY, ROE and ROA) Introduction to technical analysis: looking at charts to predict trends.
5. Portfolio management Equity portfolios: Risk of stocks and equity portfolios. Normal distribution of returns in equities. Correlation. Final presentation: equity portfolio.
6. Introduction to derivatives Introduction to derivatives: ETP and OTC Using futures for investing (introduction to leverage) Introduction to options (simple approach) Using derivatives in the corporate world (theoretical approach to hedging risks)

1. The macro picture

Relationships between economic cycle and financial markets
Indicators: leading, lagging and coincident. Offer, demand and sentiment
Asset allocation using macroeconomic forecast
Central bank and monetary policy: how interest rates are set (interbank market)
ECB, FED, BOE: hawkish and dovish central bankers

2. Fixed income market

Money Market Instruments: Treasury bills, boring but safe instruments
Yield curve: spot and forward rates
Government Bonds: Treasury Notes and Bonds; yield spreads
Other type of bonds: emerging markets, junk bonds, high yield bonds
Introduction to valuation: bond yield (bullet bonds)

3. Foreign exchange market

FX market structure: market conventions (how to read the FX market?)
Spot rates: cross currency arbitrage
Bid and ask
Hedging the currency risk with forwards (export and import)

4. Equity Market

World equity markets structure: the stock exchange
Market organization: brokers, dealers, issuers and investors
Equity indices: long, short, price value and total return
Market operations: IPO, takeover bid, split, capital increase
Introduction to fundamental analysis: top-down, bottom-up
Investment styles: value, growth and blended
Introduction to fundamental analysis: key ratios (PE, Relative PE, PBV, DY, ROE and ROA)
Introduction to technical analysis: looking at charts to predict trends.

5. Portfolio management

Equity portfolios:
Risk of stocks and equity portfolios.
Normal distribution of returns in equities.
Correlation.
Final presentation: equity portfolio.

6. Introduction to derivatives

Introduction to derivatives: ETP and OTC
Using futures for investing (introduction to leverage)
Introduction to options (simple approach)
Using derivatives in the corporate world (theoretical approach to hedging risks)

Metodología

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

The syllabus has therefore been designed to include:

1.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.

2.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.

3.A relational or group level: The course makes use of the case study methodology whereby students working in groups can analyse, propose and put forward solutions to the cases they have been assigned

Criterios de evaluación

Class participation (5%) Assignments (45%) and Final Exam (50%)

The minimum attendance to have the right to take the exam in ordinary evaluation is 80%, and to have the right to take the exam in the extraordinary evaluation is 50%, not counting justified absences in accordance with Internal Regulations.

The two types of evaluation are as follows:

1. Ordinary evaluation.

A minimum score of 5 is required both in the final exam and in the average (applying the weights mentioned above) in order to pass the course. The grading criteria can be summarized as follows: if both the final exam grade and the overall average grade are above 5 then the final grade is the average grade. Otherwise, the final grade is the minimum of the final exam grade and the overall average grade.

2. Retake.

If a retake exam is needed (only in cases where the student failed the ordinary evaluation), the final course grade will be determined by:

- In case the student received an APZ (it means that the previous exam was postponed but justified by medical or family-related reason and approved by Program Management), the original breakdown will be maintained.
- In case the student received an NP (it counts 0; not justified absence in the previous exam) or FAIL, the retake will count 100% as the final grade of the course.

Tipo:	OBL	Curso:	3	Periodo:	S semestre
Créditos ECTS:	6 ECTS

Introducción a los Mercados Financieros (2235.YR.013015.1)

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