Curricular Unit:Code:
Financial Markets and Products1175MPFI
3UndergraduateBusiness Sciences5 ects
Learning Period:Language of Instruction:Total Hours:
Winter SemesterPortuguese/English65
Learning Outcomes of the Curricular Unit:
The UC aims to develop an understanding of how financial markets work, based on advanced literature and technical analysis, and to strategically use financial instruments and strategies to hedge financial risk in the derivatives market. The following skills are expected to be developed: specific knowledge on financial markets; analysis, synthesis and information management; problem solving in risk management; interdisciplinary communication skills; building complex arguments with supporting evidence; autonomous work; ability to analyse relevant social and ethical issues.
1. Financial Markets
2. Money and monetary systems: types and functions of money; determinants of the money demand; money supply aggregates; the money multiplier effect; the evolution of monetary systems.
3. Financial Institutions: institutional and functional classification; the Portuguese supervision model.
4. Central Banks and the supply of money: narrow money; discount rate, reserve requirements and open market operations; the function of lender of last resort; monetary policy, inflation and growth.
5. Financial Products: the value of a stock; systemic and not systemic risk; risk, liquidity and profitability; benchmark indexes; index trading
6. Fundamentals of Technical Analysis: hypothesis of efficient market theory; charting and Technical Analysis; support and resistance lines; moving averages; the Dow Theory.
7. Derivatives and Risk Management: forward contracts; futures contracts; swaps; options.
Demonstration of the Syllabus Coherence with the Curricular Unit's Objectives:
The course aims to provide students with an understanding of the importance and mechanisms of financial markets, as well as how they interact with economic policy and economic systems. As such, the course covers the major financial instruments as well as the fundamental principles of technical analysis, as well as how to use derivatives in financial risk management. The relationship between financial markets and economic systems is examined in terms of monetary policy and the impact of financial market performance on the real economy.
Teaching Methodologies (Including Evaluation):
The teaching methodology combines theoretical presentations of financial market concepts with technical analysis techniques and derivatives-related practical exercises. Throughout the classes, practical examples and graphical analysis are used, particularly when discussing charting and the derivatives market. Two intermediate tests (50 percent + 50 percent) or a final exam are used to assess students.
Demonstration of the Coherence between the Teaching Methodologies and the Learning Outcomes:
The methodology used combines theoretical presentation with graphical analysis and calculus. In addition to the theoretical presentation of the contents, items 1 to 4 give more relevance to graphical analysis and economic theory, whereas items 5 to 7 give greater importance to graphical analysis and calculus. Students are asked to solve problems throughout the course. Besides problem solving, the practical application of knowledge is also established through the use of examples related to financial markets and the current economic-financial crisis.
Abreu, M. e Afonso, A. e Escária, V. e Ferreira, C. (2018). Economia Monetária e Financeira. 2ª Ed. Escolar Editora, Lisboa. [BFP 336.74/ECO/106011]
CMT Association (Org.) (2019). “CMT Level I 2019: An Introduction to Technical Analysis”. New Jersey, John Wiley & Sons.
Mankiw, N. G. e Taylor, M. P. (2017). “Economics.” Hampshire: Cengage Learning. [BFP 33/MAN/8087 - 4ª ed.].
Sá e Silva, E. (2016). Mercados a Prazo. Futuros, Forwards e Opções. Porto: Vida Económica. [CDU 658].
Silva, M. G. e Nunes, P. F. (2019). Ganhar na Bolsa com Análise Técnica. Odivelas: Bookout.
Lecturer (* Responsible):
Luísa Vasconcelos (