Course program
1. Characteristics, functions, and architecture of the financial system (4 hours)
2. Financial assets, markets, and intermediaries (6 hours)
3. Organization and regulation of secondary markets (6 hours)
4. Risk, stability, and efficiency of financial intermediaries (4 hours)
5. Theories on the firm financial structure and financial system (8 hours)
6. Equity evaluation: earnings, dividends, and cash flows (4 hours)
7. Estimate and decomposition of the equity risk (4 hours)
8. Equity evaluation models (6 hours)
9. Theoretical relation among equity price, return on equity, and growth (6 hours)
10. Bond evaluation models and risk analysis. The estimate of the yield to maturity, of the holding period yield, duration, and convexity (6 hours)
11. Organization and regulation of derivative markets (2 hours)
12. Characteristics and functions of future and option contracts (6 hours)
13. Recent developments of the international regulatory framework on the banking system (Basel 3) (10 hours)
Prerequisites
It is useful for the student to know the basic concepts of statistics (mean and variance of a random variable; covariance and correlation between two random variables; the statistical tool of simple linear regression) and mathematical analysis (linear and non-linear function; first and second derivatives of a function).
Books
R.S. Fuller e J.L. Farrell, "Analisi degli investimenti finanziari", McGraw-Hill, Milano, ultima ed. Capp.1-4; cap. 7; capp.10-13; capp.14-15; cap. 19.
G.P. Szego, "Il sistema finanziario. Economia e regolamentazione", McGraw-Hill, Milano, ultima ed. Capp. 1-4; cap. 7 (7.1-7.6); cap. 9; capp. 10-11; capp. 16-17.
Lipparini A. (a cura di), “Economia e gestione delle imprese”, Il Mulino, Bologna, 2007, cap. 2 e cap. 10 (la finanza d’impresa e la creazione del valore, EVA).
A. Di Clemente, "Verso una nuova architettura internazionale di vigilanza finanziaria. L'impatto delle nuove regole su banche e imprese italiane", Aracne Editrice, Roma, 2° ed. 2016, pp. 200. Parte I da pp. 11 a pag. 30. Parte II da pag. 51 a pag. 84. Parte III da pag. 117 a pag. 141.
Teaching mode
The teaching method followed by this course includes frontal lectures and the analysis of empirical cases.
Frequency
Attendance is strongly recommended, even if optional.
Exam mode
In the evaluation of the exam, the final grade is determined using the following criteria:
1) Complete knowledge of all the topics and the ability to connect the issues addressed (25%).
2. Rigor and logic in illustrating the financial methodologies and their relevant applications (25%)
3. Use of graphic tools to be appropriately framed in the financial models (30%).
4. Use of a technical language appropriate for financial discipline (20%)
The fulfillment of the elements n.1 and n.2 is a necessary condition for the achievement of a score equal to 25/30. Grades above 25/30 will be awarded to students whose exam satisfies all four of the elements listed above.
For attending students, there is an optional ongoing evaluation in the form of a written test divided into four open questions on the topics covered in class, lasting a total of 90 minutes. This written test is followed by an oral exam on the remaining course program.
For the non-attending students, the exam consists of a unique final oral exam on the entire syllabus lasting 30 minutes.
Bibliography
A. Di Clemente (2017), “Analisi del rischio sistemico attraverso un approccio di network”, in A. Di Clemente (a cura di) Instabilità finanziaria globale: come governarla?, vol. 2, pp. 33-50, Aracne Editrice, Roma, ISBN: 978-88-255-0717-1, doi:10.4399/97888255071713.
Lesson mode
The course includes traditional frontal lessons with the aid of electronic slides. During the lessons, tables, and graphs of financial data and information statements relating to issues of financial instruments such as corporate and sovereign bonds are commented on. The course uses Moodle, accessible via elearning.uniroma1.it, as a tool for sharing detailed information on the teaching material, complementary readings, and the dates of the ongoing test and the final exam dates. In addition, the Moddle platform allows to interact with students even remotely.
