Curricular Unit:Code:
Financial Markets and Products987MPFI
Year:Level:Course:Credits:
3UndergraduateBusiness Sciences5 ects
Learning Period:Language of Instruction:Total Hours:
Winter SemesterPortuguese/English65
Learning Outcomes of the Curricular Unit:
To understand the evolution and mechanisms of financial markets, and to recognize its relevance and links with economic systems and economic policies. To know the main financial instruments and their application in financial risk management.
Skills: acquisition of specific economic knowledge; analysis and synthesis; information management; interdisciplinary communication; application of knowledge; autonomy.
Syllabus:
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 the understanding of the relevance and mechanism of financial markets, recognizing its articulation with economic policy and economic systems. As such, the course presents the main financial instruments and the basic principles of technical analysis, and further explains how to use derivatives in financial risk management. The articulation of the financial markets with economic systems is analysed in relation to monetary policy and the impact of the financial markets’ performances in the real economy.
Teaching Methodologies (Including Evaluation):
The teaching methodology combines the theoretical presentation of financial market concepts, with technical analysis techniques and practical exercises related to the derivatives market. Practical examples and graphical analysis are used throughout the classes, especially when referring to charting and the derivatives market. Evaluation is based upon two intermediate tests (50%+50%) ora final exam.
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.
Reading:
Abreu, M. e Ferreira, C., Escária, V. e Afonso, A. (2018). “Economia Monetária e Financeira”. Lisboa: Escolar Editora.
Leão, E. R. e Leão, P. R e Lagoa, S. C. (2018). “Política Monetária e Mercados Financeiros”. Lisboa: Edições Sílabo.
Mankiw, N. G. e Taylor, M. P. (2017). “Economics.” Hampshire: Cengage Learning.
Neftci, S. N. e Policano, A. J. (1984). Can chartists outperform the market? Market efficiency test for ‘technical analysis’. Journal of Futures Markets. Winter 84, 4(4), pp. 465-478. DOI: 10.1002/fut.3990040403.
Rehman, M. U. e Khidmat, W. B. (2013). Technical analysis of eficient market hypothesis in a frontier market. Studies in Business & Economics, 8(2), pp. 60-67.
“Technical analysis”. [Online].
Zoicas-Ienciu, A. (2014). Technical analysis and market efficiency. Some remarques over the existing literature. International Multidisciplinary Scientific Conference on Social Sciences & Arts SGEM. p671-677.
[Informação disponibilizada na plataforma.]