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Financial Economics and Risk Economics

Recommended Prerequisites
Economics of Money and Finance and Statistics
Teaching Methods
Theoretical-practical lectures based on expositive and interactive methods and through the use of
audiovisual techniques. In these lectures students also carry out individual practical works and group
discussion of problems in a real world framework. The theoretical-practical lectures are complemented
with office hours for individual attendance.

Learning Outcomes
The aims are that students acquire competencies in (1) asset pricing models, (2) efficient portfolios
construction and, (3) financial risk management with and without financial derivatives
Work Placement(s)
No
Syllabus
1. Principles of financial decision
2. The mean variance portfolio theory
3. Models of equilibrium in the capital markets
4. Efficient markets
5. Interest rate theory and bond pricing models
6. Interest rate risk and the management of bond portfolios
7. Financial futures
8. Negotiable financial options

Economics of Financial Institutions and Financial


Systems
2nd Cycle Studies - Mestrado
Mode of Delivery
Face-to-face
Recommended Prerequisites
Economics of Money and Finance, Microeconomics I and II, Macroeconomics I and I
Teaching Methods
Theoretical lectures and tutorials. During the tutorials the students present and discuss articles on the
subjects of the course.
Learning Outcomes
Students should acquire skills that enable them to acquire competencies on: 1) analysis of the nature
and functioning of the financial institutions and financial systems; 2) analysis of asymmetric information
and credit rationing; 3) systemic risk problems; 4) Supervision and regulatory instruments; 5) causes and
nature of financial crises; 6) process of financial integration and financial stability in Europe.
Work Placement(s)
No
Syllabus
1. Financial intermediation
2. Asymmetric information and credit rationing
3. Individual risk and systemic risk in the banking system
4. Bank regulation and supervision. The Basel Accords
5. Financial crisis
6. Financial integration and stability in Europe

Intermediate Econometrics
By the end of this unit, the student is expected to be able to:
- selected and apply appropriate estimation methods;
- apply appropriate testing procedures;
- analyse and manipulated basic expressions with stochastic elements.

Competencies:
1) Specific:
- analyse the properties of statistical series and suggest adequate models;
- present different estimation methods and discuss their advantages and disadvantages given the model
to be estimated;
- apply appropriate testing procedures;
- use software to estimate and analyse econometric models.
2) Generic:
- analyse data;
- solve problems;
- use computer software
Work Placement(s)
No
Syllabus
1. The linear regression model
2. Panel data
3. Instrumental variables
4. GMM estimation
5. ML estimation
6. Discrete choice models
7. Truncated and censored variables, duration and count data models
8. Time series and autocorrelation
9. ARMA models

10. VAR models


11. Non-stationary processes

Intermediate Macroeconomics
Learning Outcomes
Provide students the knowledge on how to use modern macroeconomics methodology, through formal
mathematical analysis, complemented with graphical analysis and intuitive explanations of the models
results. Nevertheless, modelling is still done in discrete time, as opposed to the more advanced courses in
macroeconomics, in which it is done in continuous time. At the end of the program the student should be
able to use these models to explain the stylized facts of macroeconomic, confront theories with empirical
data, highlighting recent macroeconomic events; ensure coherence between long and short run analysis;
and to discuss in a rigorous and consistent way their implications for economic policy.
Work Placement(s)
No
Syllabus
1. Some facts about unemployment
2. Efficiency wages and unemployment
3. Trade unions and unemployment
4. Some facts about business cycles
5. Investment and asset prices.
6. Consumption, income and wealth.
7. Monetary policy and aggregate demand
8. Inflation, unemployment and aggregate supply
9. Explaining business cycles
10. Stabilization policy

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