This course is about investment decisions, particularly investments in financial assets. To make informed investment decisions it is first necessary to gain an understanding of available assets, their payoff structures, and how they are priced. Secondly, it is necessary to gain and understanding of how to combine assets into portfolios, and determine the optimal portfolio for a given investor. The specific topics covered in detail in this course are pricing of financial assets, such as stocks and bonds, portfolio theory, asset pricing and portfolio evaluation.
Course description for study year 2022-2023. Please note that changes may occur.
This course is an intermediate course in investments. It describes portfolio decisions and key aspects of financial investments. The course will cover the following topics: Basic financial instruments (equities, fixed income, derivatives), optimal portfolio choice, equilibrium asset pricing models and fund performance measurement.
Upon completion of the course:
Students will have deep knowledge of financial markets, various financial institutions and how financial instruments are traded.
Students will have obtained a thorough understanding of the portfolio theory, its relation to the capital asset pricing model (CAPM). Students will be familiar with several extensions of the CAPM model and understand why these extensions were introduced.
Students will have obtained detailed knowledge of asset allocation, its purpose and limitations.
Students will be able to examine portfolio expected returns and risk, and apply various measures of fund performance.
Students will be able to evaluate the performance of portfolios and investment funds.
The knowledge gained by students will enable them to apply financial theory to practical investment problems that they may encounter both as private person sand in their professional lives.
Students will be able to apply the theory and models to practical problems of relevance for investors through in-depth knowledge of the financial markets and rigorous analytical thinking.
Students will have improved their analytical thinking.
Students will be able to solve financial problems using Excel or other relevant software, thereby deepening their ability to use such software.
Required prerequisite knowledge
Form of assessment
Information about coursework requirements will be announced on Canvas.