Organisation: Instructor: Prof. Dr. Peter N. Posch and tba Dates: Wednesdays, 8-10am Thursdays, 2-4pm. Rooms: tba tba Help sessions: tba

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Description

Financial markets are global; currencies for example can be traded anytime and from anywhere. In such a connect world the knowledge of financial instruments, institutions and markets is crucial. The lecture aims to give an analytic framework for the analysis of the world wide economy. We will strive to develop an overview on the role of institutions, their history and more importantly, their future. With this knowledge at hand we continue to analyze previous and current crisis.

Requirements

As this lecture contains elements from finance (e.g. discounting, choices under uncertainty), economics (e.g. Mundell-Fleming) and mathematics (e.g. basic probability theory, algebra) a basic knowledge in each of these subjects is required. Furthermore all students will be required to work self-dependent on their gaps in knowledge once they appear.

 

Course Outline: (subject to change)

1. Introduction
2. General Principles
1. Law of one price
2. Interest-rate parity
3. Pricing of derivatives – A primer
3. Foreign-Exchange Markets
1. General
2. Spot vs. Future
3. Options
4. Exchange rate behavior
1. Monetary approach
2. Overshooting (Dornbusch)
3. Portfolio-Balance approach
5. Cross-Currency Swaps
6. EUR/$ market
4. Credit Markets
1. Treasuries
2. Bonds
3. Credit derivatives
4. Basis-Swaps
5. Real estate markets - A primer
6. Econs vs. Humans - Behavioral approaches
7. Currency- and Financial Crisis

Downloads are password protected. The username is „student“. You can use your ANA (Authentifizierter Netzzugangs-Account) from kiz and the webVPN to bypass the protection.

 

Downloads - Lecture:

 

Exam:

The exam will take place on -tba-. Please do not forget to register for the exam with the Studiensekretariat at least one week before the exam, if you are writing for a grade.

 

Lecture Timetable:

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Literature:

Brealey, Myers, Allen. Principles of Corporate Finance, McGraw-Hill, 2005.
Fabozzi, Modigliani, Jones, Ferri. Foundations of Financial Markets and Institutions, Prentice Hall, 2002.
Krugman, Obstfeld. International Economics: Theory and Practice, Addison Wesley, 2008.
Shiller. Irrational Exuberance, 2nd edition. New York: Doubleday, 2006.
Siegel, Stocks for the Long Run, 4th edition, New York: McGraw-Hill, 2008.

Paper

Tba