The objective of this course is for students to understand the principles that govern the price formation process of both financial and real assets, as well as to become familiar with and apply the basic techniques of asset valuation.
To achieve this objective, students must acquire a set of knowledge, skills, and attitudes.
In terms of knowledge, by the end of the course, students will be able to:
- Summarize how financial markets operate and understand the decisions faced by participants in these markets.
- Understand the concepts of risk and return associated with the cash flows generated by assets.
- Apply the concept of the time value of money to calculate discounted values.
- Recognize the different types of derivative instruments and their use in risk management.
- Analyze the functioning of financial markets and identify the imperfections that hinder the practical application of valuation models and allow agents to earn abnormal returns.