GRADUATE SCHOOL
Financial Economics (Without Thesis)
ECON 532 | Course Introduction and Application Information
| Course Name |
Macroeconomics for Investment
|
|
Code
|
Semester
|
Theory
(hour/week) |
Application/Lab
(hour/week) |
Local Credits
|
ECTS
|
|
ECON 532
|
Fall/Spring
|
3
|
0
|
3
|
7.5
|
| Prerequisites |
None
|
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| Course Language |
English
|
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| Course Type |
Elective
|
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| Course Level |
Second Cycle
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| Course Coordinator | - | |||||
| Course Lecturer(s) | - | |||||
| Assistant(s) | - | |||||
| Course Objectives | To teach the students basic linkages between the macro economy and financial markets. |
| Learning Outcomes |
The students who succeeded in this course;
|
| Course Description | The course aims to provide a macroeconomic framework to aid understanding of the movement of financial markets. It aims to do so both by using traditional macroeconomic equations, but also by developing macroeconomic proxies and signals developed from ideas familiar to corporate analysts and investors. It aims to provide not just a theoretical framework for analysing growth, elements of the business cycle, and the cashflows associated with them, but also practical demonstrations and tools. Throughout, the ideas will be accompanied by casestudies derived from current or nearcurrent economic and financial situations, principally from the US and Asia.Each class will kick off with a discussion of current events in the markets and how these relates to the course material. |
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Core Courses | |
| Major Area Courses |
X
|
|
| Supportive Courses | ||
| Media and Management Skills Courses | ||
| Transferable Skill Courses |
WEEKLY SUBJECTS AND RELATED PREPARATION STUDIES
| Week | Subjects | Related Preparation |
| 1 | Focus on competitive markets starting from goods markets and extending to financial markets | Read Chapter 1113 from the book The Truth about the Markets by John Kay |
| 2 | Introduction to investments. Where does the money come from? Who are the key players and why do they invest? What is an asset class? | Follow financial press and be ready to quote/discuss relevant events/stories/articles. Write a short essay as to why people invest. |
| 3 | A general overview of macroeconomic indicators and basic identities. Understanding economic, business and financial market cycles. | Follow financial press and be ready to quote/discuss relevant events/stories/articles. Students will review their previous macroeconomic literature and be ready to contribute to the debate |
| 4 | Introduction to concept of “policy” and understanding central banks, treasuries and their objectives. | Follow financial press and be ready to quote/discuss relevant events/stories/articles with specific emphasis on recent policy decisions |
| 5 | Start building intuitive models to link policy, macroeconomic news flow and financial markets. Concept of value and valuation. | Follow financial press and be ready to quote/discuss relevant events/stories/articles. Students will be asked to study company balance sheets and P&Ls. |
| 6 | Midterm exam and Movie “Barbarians at the Gates” | Review of all previous lectures. |
| 7 | Introduction to portfolio approach to investment. Quantification of risk and Risk/Return trade off | Review and understand basic statistical concepts of standard deviation, variance, covariance, correlation. Follow financial press and be ready to quote/discuss relevant events/stories/articles. |
| 8 | Introduction to multi asset and multi currency portfolios and the concept of Asset Allocation, both strategic and tactical. | Follow financial press and be ready to quote/discuss relevant events/stories/articles. |
| 9 | Analysing country risk and how changes in risk leads to changes in asset preferences. | Students will analyse an emerging country of their choice and present their findings. |
| 10 | Introduction to Capital Asset Pricing Model, Modern Portfolio Theory and Efficient Market Hypothesis. | Follow financial press and be ready to quote/discuss relevant events/stories/articles. |
| 11 | A review of precrisis economic and financial world order with specific emphasis on Bretton Woods II. | Follow financial press and be ready to quote/discuss relevant events/stories/articles. Review Bretton Woods structure. |
| 12 | Understanding the concept of Private Sector Savings Surplus and its impact on financial market returns. | Review Asian economic and business model. Follow financial press and be ready to quote/discuss relevant events/stories/articles. |
| 13 | Midterm exam and watch bond and equity markets part of documentary “Ascent of Money” by Niall Ferguson | Review of all previous lectures since the beginning of semester. |
| 14 | Discussions on the 200708 Financial crisis. Analyse the reasons that caused the crisis. Introduction to the concept of Pricing Model Uncertainty | Students will study and bring articles on the financial crisis to be discussed during the lecture. |
| 15 | Review of course material and case studies prior to final exam | |
| 16 | Review of the Semester |
| Course Notes/Textbooks | The Truth About The Markets – John KayThe Long and Short of It – John KayPublications by Woody H Brock and Michael Taylor |
| Suggested Readings/Materials | When Markets Collide – Muhamed El Erian Black Swan – Nicholas Taleb Fooled By Randomness Nicholas Taleb |
EVALUATION SYSTEM
| Semester Activities | Number | Weigthing |
| Participation |
16
|
10
|
| Laboratory / Application | ||
| Field Work | ||
| Quizzes / Studio Critiques | ||
| Homework / Assignments |
5
|
20
|
| Presentation / Jury |
1
|
10
|
| Project | ||
| Seminar / Workshop | ||
| Oral Exams | ||
| Midterm |
2
|
30
|
| Final Exam |
1
|
30
|
| Total |
| Weighting of Semester Activities on the Final Grade | 70 |
|
| Weighting of End-of-Semester Activities on the Final Grade | 30 |
|
| Total |
ECTS / WORKLOAD TABLE
| Semester Activities | Number | Duration (Hours) | Workload |
|---|---|---|---|
| Theoretical Course Hours (Including exam week: 16 x total hours) |
16
|
3
|
48
|
| Laboratory / Application Hours (Including exam week: 16 x total hours) |
16
|
0
|
|
| Study Hours Out of Class |
15
|
3
|
45
|
| Field Work |
0
|
||
| Quizzes / Studio Critiques |
0
|
||
| Homework / Assignments |
5
|
6
|
30
|
| Presentation / Jury |
1
|
22
|
22
|
| Project |
0
|
||
| Seminar / Workshop |
0
|
||
| Oral Exam |
0
|
||
| Midterms |
2
|
20
|
40
|
| Final Exam |
1
|
40
|
40
|
| Total |
225
|
COURSE LEARNING OUTCOMES AND PROGRAM QUALIFICATIONS RELATIONSHIP
|
#
|
Program Competencies/Outcomes |
* Contribution Level
|
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1 |
2 |
3 |
4 |
5 |
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| 1 | To improve and deepen expertise in economics and finance. |
X | ||||
| 2 | To be able to comprehend the interaction between economics, finance and related fields. |
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| 3 | To be able to apply the advanced level knowledge acquired in economics and finance. |
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| 4 | To be able to create new knowledge by combining the knowledge of finance and economics with the knowledge coming from other disciplines and be able to solve problems which requires expert knowledge by applying scientific methods. |
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| 5 | To be able to use computer programs needed in the fields of economics and finance as well as information and communication technologies in advanced levels. |
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| 6 | To be able to think analytically to identify problems in finance and economics and to be able to make policy recommendations in economics and finance based on scientific analysis of issues and problems. |
X | ||||
| 7 | To be able to develop new strategic approaches for unexpected, complicated situations in finance and economics and take responsibility in solving it. |
X | ||||
| 8 | To protect the social, scientific and ethical values at the data collection, interpretation and dissemination stages and to be able to institute and observe these values. |
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| 9 | To be able to critically evaluate the knowledge in finance and economics, to lead learning and carry out advanced level research independently. |
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| 10 | To be able to use a foreign language for both following scientific progress and for written and oral communication. |
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*1 Lowest, 2 Low, 3 Average, 4 High, 5 Highest