ECON414 ECONOMICS OF FINANCIAL INVESTMENT
| Course Code: | 3110414 |
| METU Credit (Theoretical-Laboratory hours/week): | 3 (3.00 - 0.00) |
| ECTS Credit: | 6.0 |
| Department: | Economics |
| Language of Instruction: | English |
| Level of Study: | Undergraduate |
| Course Coordinator: | |
| Offered Semester: | Spring Semesters. |
Course Objectives
This course aims to give the necessary background and tools to students for understanding the workings of the financial investment markets. This includes understanding the capital allocation role of financial markets, facilitating flow of funds from savers to economic investors of the economy, pricing of financial assets in these markets and formation of optimal portfolios by financial investors that consists of these financial assets. To do so, the course covers basic concepts of financial investment, management of investment portfolios and pricing of assets in these portfolios. The concepts and definitions related to the different investment types, the markets in which the securities (debt, equity and derivatives) trade and to investment companies will be introduced. The risk/return trade-off and the concept of efficient markets will be explained. Overall financial investment process and the key elements involved in this process such as asset allocation and security selection will be discussed. The course will also cover theories of portfolio management and theories of asset pricing.
Course Content
The course covers basic concepts of financial investment, management of investment portfolios and pricing of assets in these portfolios. Topics include diversification, asset allocation, portfolio optimization, factor models, the relation between risk and return, mutual funds, performance evaluation as well as basic coverage of pricing and use of financial derivatives, including options, forwards and futures.
Course Learning Outcomes
A student completing this course successfully is expected to have fully grasp the role and workings of the financial markets, be competent in valuation of basic asset types, understand the management as well as formation and analysis of optimally diversified portfolios.
Program Outcomes Matrix
| Level of Contribution | |||||
| # | Program Outcomes | 0 | 1 | 2 | 3 |
| 1 | Use and develop skillfully economic concepts and theories, analyse economic behaviour and events by conceptualizing and evaluating via scientific methods (Has skills regarding theory and analysis) | ✔ | |||
| 2 | Evaluate how economic policies affect economic performance and how economic interest, relationship and interaction affect policy decisions (Knowledgeable about economic policies) | ✔ | |||
| 3 | Design and carry out studies regarding data collection, analysis and evaluation, that can be used in decision processes at every level (individual, firm, government, etc.)(Knowledgeable about quantitative and qualitative methods) | ✔ | |||
| 4 | Evaluate systematically and compare economic knowledge, phenomena and methodology; Develop critical, creative/innovative approaches to these (Critical, creative, innovative) | ✔ | |||
| 5 | Understand current economic phenomena and relevant political developments using information and data from various resources and provide multifaceted explanations (Concerned about current events) | ✔ | |||
| 6 | Follow developments in economic theory and methods; Be open to continuous learning (Open to continuous learning) | ✔ | |||
| 7 | Have skills to work independently and in a team (Individual and teamwork) | ✔ | |||
| 8 | Approach critically to economic and societal events and problems while being sensitive to social problems; Produce solutions to these problems by scientific approach; Share own thoughts (Sensitive to social problems) | ✔ | |||
| 9 | Communicate clearly, effectively and fluently (in English and Turkish) verbally and in writing, utilizing new technologies (Has effective communication skills) | ✔ | |||
0: No Contribution 1: Little Contribution 2: Partial Contribution 3: Full Contribution