At the end of the course students should be able to: - Compute present and future values of cash-flow streams to compute the net present values of different real and financial investments. - Have a basic knowledge of the functioning of financial markets and of the way in which investment decisions are made. - Understand the risk-return tradeoff. Understand how diversification affects risk. - Have a clear understanding of the difference between systematic and diversifiable risk and know how to measure each. - Understand how interest rates are set and the principles of valuation of fixed income securities. - Know the basic types of derivatives and understand why and how they are used in risk management.

K2: To know basic humanistic contents, oral and written expression, following ethical principles and completing a multidisciplinary training profile. K3: Acquire knowledge of the theories and techniques specific to Economics, employing appropriate terminology and the scientific method. K4: To understand the functioning of the economy as the efficient allocation of scarce resources, including the importance of equity. K5: Know quantitative and qualitative research techniques, and be able to discern which are the most appropriate to apply in the field of economics. K6: Comprehend the economic and social impact of various public policies on different agents and in diverse socioeconomic contexts. K7: Understand the economic variables that regulate the economy and govern the behaviour of agents. K8: Understanding economic institutions K10: Understand the fundamental elements of the economic environment from the perspective of different theories and various economic agents. S4: Manage and develop autonomous learning within the field of Economics. S5: Formulate, debate, and defend critical and ethical arguments related to Economics. S6: Identify, collect, interpret and manage relevant information on economic issues, using the appropriate concepts and methodologies of analysis. S7: Design economic and social programs to address the needs of economic agents. S8: Formally representing economic decision-making processes S9: Derive relevant economic information from the data, and be able to process it to answer the questions of interest S10: Prepare advisory reports for economic agents relevant to decision-making. S12: Model and quantitatively interpret specific economic issues C3: Independently develop and defend a problem within the disciplinary scope of the degree, proposing well-founded solutions through the application of the knowledge, skills, tools, and strategies acquired or developed throughout the degree program. C4: Solve economic models of interest from both theoretical and numerical perspectives. C5: Use appropriate statistical and econometric tools to address and solve economic problems.

Topic 1 Introduction: Financial Markets Topic 2 The necessary tools: Financial Mathematics Topic 3 The value of an investment: Introduction to NPV Topic 4 Fixed Income (I) Topic 5 Fixed Income (II) Topic 6 Characterisation of Financial Assets and Portfolios: Risk and return Topic 7 Investment management: Portfolio Theory Topic 8 The capital asset pricing model (CAPM) Topic 9 Derivatives (I) Topic 10 Derivatives (II)

Teaching methodology will be as follows: (1) Each topic or sub topic is presented by the professor in a theory session. After the theory session the students have to study the materials, do complementary readings and work on the relevant problem sets. These problem sets and questions from the students are solved in the next practice session. The problem sets have to be solved at home prior to the practice session. (2) The course material for each topic (slides that will be used in theory sessions and problem sets to be solved in practice sessions) is provided in advance through the intranet in Aula Global 2. (3) At the beginning of the course there will be two practice sessions that will introduce the students to the use of excel in finance. These sessions will take place in the computer labs and the teacher will guide the students through several computer exercises. (4) Each teacher has scheduled weekly office hours that the students can use to obtain extra help.