Teaching Methodologies
The methodology of the classes is based on a pedagogy centered on the students’ learning process, fostering their capacity for initiative,
research and self-learning.
Expository methodology, using practical examples to assimilate knowledge. Solving exercises in the practical component, with the aim of
developing the students’ analytical spirit. Classes are all theoretical and practical.
Active student participation is strongly encouraged. A stock portfolio management simulation game throughout the course will provide a
hands-on learning experience.
Learning Results
The curricular unit aims to provide an understanding of the securities that are traded on the financial markets. At the end of the course the
student should: (i) know the essential characteristics of bonds, as well as the existing types; (ii) learn the main valuation and risk
management techniques in the bond market; (iii) know how to interpret the interest rate curve, evaluate a bond and formulate a trading
decision; (iv) calculate the rate of return on an investment in the bond market; (V) characterize the interest rate risk associated with a bond
portfolio; (VI) master the operating rules of the cash stock markets and the different methodologies for calculating the intrinsic or
fundamental value of a share listed on a regulated market; (VII) know the determinants of the cost of equity and debt capital.
Program
1. FIXED-INCOME SECURITIES
1.1 Characteristics of Bonds
1.2 Analysis of the time structure of interest rates: Spot and Forward rates
1.3 Bond valuation
1.4 Interest rate risk measures: duration and convexity
1.5 Immunization from interest rate risk
1.6. Methods for directly estimating the time structure of interest rates
2. THE STOCK MARKET
2.1 Classification of shares according to their form of representation
2.2 Classification of shares according to their form of transferability
2.3 Shares with nominal value
2.4 Shares with no par value
2.5 Share premium
2.6 Discounts and share premiums
2.7 Reduction of share capital
2.8. Redemption of shares
2.9 Own shares
2.10. Types of shares
2.11 Nature of share issue
2.12. Operation of the cash market
2.13. Structure of the secondary market
2.14. Trading on the spot market
3. Cost of capital
4. Valuation of shares using dividend models and discounted free cash flow models
Internship(s)
NAO
Bibliography
Ana, P. Quelhas. (2022). Mercado de Obrigações: Características, avaliação e medidas de risco. Editora D’Ideias
Bodie, Z., Kane, A. & Marcus, A. J. (2021), Investments, 12nd global edition, Boston: McGraw-Hill/Irwin
Damodaran, A. (2006), Damodaran on Valuation – Security Analysis for Investment and Corporate Finance, 2nd Edition, JohnWiley & Sons.
Fabozzi, F. (2016), Bond Markets, Analysis and Strategies, 9th Edition, Pearson.
MIguel, A., Mota, A., Barroso, C., Pimentel, D., Lourenço, J., Nunes, J., Oliveira, L., Ferreira, M. & Alpalhão, R. (2019), Investimentos
Financeiros: Teoria e prática, 3ª Edição, Edições Sílabo.
COMPLEMENTAR
John Y. Campbell (2018). Financial Decisions and Markets: A Course in Asset Pricing. Princeton and Oxford: Princeton University.
Serens, M. (2022), Código das Sociedades Comerciais, Edições Almedina.
Código dos Valores Mobiliários (versão atualizada, publicada no Diário da República n.º 253/2021, 1º Suplemento, Série I).