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Financial Economics
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In this class I lecture and assign reading by modules, rather than week-by-week. This gives you some leeway in developing a reading schedule. It is very important that you try to keep up with the reading - background material is very important in this class. Try to pace yourself through this material.
These homework assignments are typically not collected nor graded, but we
will be discussing them on the dates that they are due. Additionally,
keep all copies of these homework assignments. You may be required to use
them on an examination.
Module 1 - Introduction to Equities
January 20 (Tu) – January 27 (Tu) : 3 sessions
Introduction to class. Discussion of general investment objectives, strategies, and tactics. NYSE, NASDAQ stocks, reading the quotes, indices, exchanges, how traded.
Link to the reading and homework assignments for this module.
Module 2 – Equity Performance
January 29 (Th) – February 5 (Th) : 3 sessions
History of stock market, leverage, classes of stock, electronic trading, some selection and trading strategies.
Link to the reading and homework assignments for this
module.
Module 3 – Mutual Funds, ETFs, and Retirement Accounts
February 10 (Tu) - Feb 17 (Tu) : 3 sessions
Mutual funds and classifications, fees, performance issues, index funds, portfolio strategies, quotations, online management, exchange traded funds, how they work, classification, as substitutes for mutual funds, retirement accounts like 401-Ks and all classes of IRAs, ESOPs, ISOPs, tax issues.
Link to the reading and homework assignments for this module.
Examination
date: Thursday, February 19th.
Module 4 - Equity-Based Derivatives
February 24 (Tu) – March 3 (Tu) : 3 sessions
Put and Call Options, trading strategies, writing covered calls, Aruba Options model, warrants.
Link to the reading and homework assignments for this module.
Module 5 - Yield-Bearing Financial Assets (YBFAs)
March 5 (Th ) - March 26 (Th) : 5 sessions (Spring break, March 16-20, is during this period)
U.S. Treasury markets, reading the quotes. Bond values and interest rates, indexing formulas, bond mutual funds, corporate YBFAs, strips, zero-coupons, mortgage-backed markets, munis, money market FAs, repos, derivatives, money market funds. CDOs, ABCPs and the credit meltdown of 2007/2008.
Link to the reading and homework assignments for this module.
Examination
date: Tuesday, March 31st.
Module 6 – FOREX and Futures Contracts
April 2 (Th) – April 9 (Th) : 3 sessions
Futures contracts and related derivatives. Hedging strategies. Speculation with futures and arbitrage with futures and other financial assets. The FOREX market and trading in that market.
Link to the reading and homework assignments for this module
Module 7 - Real Estate
April 14 (Tu) – April 21 (Tu) : 4 sessions
Real estate financing, market theory, leverage and dangers of leverage, connection to mortgage pass-thru market, home selection, tax issues, escrow, fees, housing bubbles.
Link to the reading and homework assignments for this module
Module 8 – Investment Strategy
April 23 (Th) – April 28 (Tu) : 2
sessions
A general discussion of mid-term to
long-term investment strategies.
Portfolios, diversification, mixed investments, investment goals,
avoiding disasters.
There is no assigned reading or
homework assignments for this final module.
April 30 - FINAL EXAM
IN CLASS (there will also be a take-home component due early May).
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