Advanced Investments

Catalog description

This course presents classical and modern ideas of finance with an applied focus. Students will master the analytic tools and the financial theory for making smart investments by using stocks and bonds but will also get their hands dirty with data. The course starts with an overview of important methods from mathematics and statistics, software tools and financial data. It continues with the pricing of bonds and other fixed-income instruments, discusses the risks associated with fixed-income investments, demonstrates the methods to derive zero-coupon yield curves and shows how to hedge interest rate risk. The course then deals with stocks and covers the following topics: Predictability of stock returns, The cross-section of stock returns, Asset pricing theory (utility, discount factors, expected returns, CAPM, ICAPM, APT), Empirical asset pricing methods (time-series predictive regressions, cross-sectional Fama-MacBeth as well as Fama and French regressions). We also study the performance of Mutual funds and Hedge funds. The final session of the course will be devoted to answering questions related to this course that are frequently asked in the job interviews in investment banks.