Capital Markets

Universidad del Norte

Course Description

  • Course Name

    Capital Markets

  • Host University

    Universidad del Norte

  • Location

    Barranquilla, Colombia

  • Area of Study

    Business Administration, International Business, International Trade

  • Language Level

    Taught In English

    Hours & Credits

  • Credits

    3
  • Recommended U.S. Semester Credits
    0
  • Recommended U.S. Quarter Units
    0
  • Overview

    2. Course description

    This course introduces students to the various types of financial instruments (equity and debt-related), their related markets and valuation techniques. The first part of the course presents the structure and operation of capital markets both at national and international levels, as well as their implications in the role in the growth and leveraging of companies in developed and developing countries. A general introduction of capital markets is given initially which special emphasis on equity markets. Foundational concepts of the course include portfolio theory and various pricing models. The course then focuses on the fundamental and technical analyses of stocks. The delivery of the course will be supported by the facilities and resources of the Stock Exchange Laboratory in association with Bolsa de Valores de Colombia.

    3. Relevance

    The course provides the technical expertise to analyze companies for investment purposes. The “hands-in-action” approach results in the continuous application of concepts seen in the classroom with the assistance of the existing financial laboratory in agreement with Bolsa de Valores de Colombia. This course is relevant for those

    students willing to work in various market participants (depository institutions, insurance companies, asset management firms and investment banking firms) or as current/potential investors in the Stock Exchange.

    4. Related competences

    Specific professional competence: Being able to identify the various types of financial assets, their related markets, portfolio theory, pricing models and the investment analysis techniques of stocks.

    Basic institutional competence: Being able to analyze, synthesize, and relate concepts.

    5. General objective of the course:

    This course will:

    Introduce students to the various financial markets both nationally and internationally with emphasis on equity. Students should be able to analyze stocks through fundamental and technical analyses and to design a portfolio of stocks according to specific risk profiles.

    1. Learning outcomes

     

    At the end of the course, students must be able to:

     

    Competence dimension

    Learning outcome

    Knowledge of concepts

    Understand the various financial assets available in the market, the principles to price them, their properties and economic functions.

    Understand what are financial markets and their economic functions.

    Identify the participants in financial markets, the role of financial intermediaries.

    Understand how financial markets are regulated worldwide and in Colombia.

    Understand the concepts of risk and return.

    Understand the Portfolio Theory.

    Understand the Capital Market Theory.

    Understand the Capital Asset Pricing Model (CAPM) and other existing models.

    Understand the fundamental ratio information relevant for investment in a particular stock.

    Understand the various technical analysis techniques used to assess the performance of a stock.

    Abilities (Applying concepts)

    Being familiar with Colombian, Latin American and international stock exchanges.

    Being familiar with stock exchange information in the news and in the Stock Exchange Laboratory.

    Calculating the historical returns of a single security or a portfolio of securities.

    Calculating the expected return and risk of an asset and a portfolio of assets.

    Using the CAPM and understanding its limitations in the Colombian context.

    Conducting the fundamental analysis of a selected stock.

    Conducting the technical analysis of a selected stock.

    Being assertive in the use of the data analysis resulting from fundamental and technical analyses.

    Constructing an optimal portfolio of selected stocks considering the desired level of risk.

    Justifying the choice of a particular stock and portfolio of stocks for investment purposes.

    Using computer applications to conduct the required calculations for subsequent analysis.

    Using the Colombian Stock Exchange platform and other international data bases where information is gathered for data collection and analyses purposes.

    Relating previous concepts of accounting and financial mathematics with those of the course.

    Attitudes (As an individual)

    Adopting the role of an analyst of the Stock Exchange and suggest investment strategies.

    Properly using technical concepts in English.

    Working in teams with fellow classmates to conduct joint tasks.

    Arguing and justifying the decisions made. Commenting on the resulting consequences.

     

     

    1. Course planner

     

    Theme

    Subthemes

    In-class hours

    Independent work

    Capital markets structure and operation

    Market participants and financial innovation

    3

    Chapters 1 & 2, Fabozzi & Modigliani

    Primary and secondary markets

    3

    Chapter 7, Fabozzi & Modigliani

    Risk and return

    Risk and return concepts, portfolio theory

    9

    Chapter 8, Fabozzi & Modigliani

    Midterm Exam 1

    2

     

    Risk and return

    Risk and return theories

    9

    Chapter 9, Fabozzi & Modigliani

     

    Stock valuation (fundamental analysis)

    9

    Chapter 7, Book Palepu et al.

    Midterm Exam 2

    2

     

     

    Stock valuation (technical analysis)

    6

    Chapter 9, Book Palepu et al.

     

    Common stock market

    5

    Chapters 13 & 14, Fabozzi & Modigliani

     

     

    1. Methodology- Teaching strategies

     

    The basic teaching strategy consists of a “hands-in-action” approach, which involves continuous application of concepts to real data. This is supported by the financial laboratory of the Business School in agreement with Bolsa de Valores de Colombia. Students will be exposed to real data from the Colombian Exchange and other international data sets.

     

    The course is delivered through active interaction between the lecturer and students in class sessions. Concepts are presented by the lecturer and where possible, real data is shown to students to apply them to real situations. Short exercises, oral discussions and virtual message boards will be conducted throughout the semester. Some activities will be completed individually and others in groups to enhance workgroup in the classroom. Technical use of concepts will be promoted at all times. The course will stress calculations and interpretation of results, as well as the presentation of action plans depending on the situation. Revising the material before each session is required to achieve the learning outcomes and to enhance the active participation in class.

     

    An applied project will be conducted throughout the semester in groups of 3 students each. Students will select publicly listed companies in the Colombian Stock Exchange from various industries. They will gather data related with each stock as of stock prices, fundamental ratios and news published in the media. The objective is students analyze the selected stock through the techniques learned in class and make recommendations as analysts willing to advice to investors. Where possible, an integrative exercise will include the design of a diversified portfolio of stocks according to a specific risk profile. This will require the active interaction with other groups in the classroom. Reports will be delivered in specific dates and times according to a framework provided by the lecturer, where applicable. Language should be technical and clear at all times.

     

     

     

     

     

     

     

     

     

     

     

    1. Assessment

     

     

    Learning evidence

    Assessment period

    %

    Midterm exam I: Written exam on the capital markets structure and operation and portfolio theory. Students should be familiar with general information from such markets and they should be able to make calculations and interpret results related with portfolio theory.

    Week 5

    30

    Midterm exam II: Written exam on risk and return theories and fundamental analysis of stocks. Students should be able to use various pricing models and to conduct the fundamental analysis of selected stocks.

    Week 12

    30

    Applied Project of all the concepts covered during the semester for a selected stock.

    Throughout the semester

    30

    Quices and message boards.

    Throughout the semester

    10

    Contact the Colombia Program Manager for the complete syllabus.