The course aims at comprehending and mastering concepts as diverse as uncertainty, economic risk, and the functioning of the main financial tools required to protect economic agents' risk exposure. In the first part of the course, basic notions about the theory of expected utility and risk aversion will be introduced with the aim of comprehending how rational individuals take optimal decisions under uncertainty. In the second part, this method will be applied to study how investors optimally choose financial assets and construct efficient portfolios. The second part's objective is to understand the main financial models, such as the Capital Asset Pricing Model, their empirical estimation, using financial data, as well as their limits, through the analysis of the event studies. In the last part, the main financial tools will be analyzed using the conceptual framework introduced in the previous two parts. Futures, derivatives, options, and bonds will be analyzed.

PART I: Risk and uncertainty

1. Expected utility

2. Risk aversion

3. Choice under uncertainty 

PART II: Financial markets: models and estimators 

4. Stock markets and portfolio choice

5. Mean-variance

6. Capital Asset Pricing Model (CAPM)

7. CAPM estimators 

8. Arbitrage

9. Market efficiency and abnormal returns: Event study

PART III: Main financial instruments

10. Futures and derivatives

11. Options

12. Bonds

BASIC MATHEMATICS AND STATISTICS where presents in the study plan

- Knowledge and comprehension capability of concepts of uncertainty, risk, and of the main financial models and estimators.

- Knowledge and comprehension capability tested in class through the discussion of specific cases and exercises on Microsoft Excel.

- Self-judgement: the student shall be able to comprehend, analyze, and compare complex real-life cases and to apply the new tools.

- Communication skills: the student shall be able to comprehend and use the financial jargoon

- Comprehension capability: the student will be able to develop cognitive models to be used in the future experience in the job market.
 

The teaching material prepared by the lecturer in addition to recommended textbooks (such as for instance slides, lecture notes, exercises, bibliography) and communications from the lecturer specific to the course can be found inside the Moodle platform › blended.uniurb.it

Microsoft Excel exercises will be presented and discussed in class
 

Teaching

Teaching will be supported by presentation slides and Microsoft Excel worksheets. 
 

Attendance

Constant attendance is recommended, but not mandatory
 

Course books

Simon Benninga and Tal Mofkadi. Financial Modeling, Fifth Edition. MIT Press

Assessment

Oral exam based on the material developed during the course. The interview is aimed at assessing the student's conversational skills as well as the student's analytical and critical capabilities. The evaluation criteria are: the level of mastery of theoretical knowledge, of the graphical and mathematical tools used; the degree of articulation of the answer; the degree of appropriateness of the explanation; the degree of accuracy of graphic and formal analysis. Learning outcomes will be assessed during an interview that comprises four to five oral questions.

Disabilità e DSA

Le studentesse e gli studenti che hanno registrato la certificazione di disabilità o la certificazione di DSA presso l'Ufficio Inclusione e diritto allo studio, possono chiedere di utilizzare le mappe concettuali (per parole chiave) durante la prova di esame.

A tal fine, è necessario inviare le mappe, due settimane prima dell’appello di esame, alla o al docente del corso, che ne verificherà la coerenza con le indicazioni delle linee guida di ateneo e potrà chiederne la modifica.