An understanding of financial markets : from tulip bulbs to crypto-assets trading

ECTS : 6

Description du contenu de l'enseignement :

The financial world has never been so close to us. Trading Japanese stocks, American bonds, or crypto assets is now at one’s fingertips, using the mobile phone in our pocket. It has never been so easy to invest money in any type of asset.
 
When looking at social medias, one can see a myriad of entrepreneurs making millions of dollars investing on many assets like real estate, stocks or cryptos. It looks so easy and appealing. But before following this advice one may need to have a basic understanding of how financial markets work.
 
From trading share of companies hundreds of years ago to NFTs today, this course will go through the good side and the dark side of the financial world.
 
Students who complete this course successfully will be able to:

• Understand why financial markets exist
• Understand the basic functioning of financial markets
• Understand basic products exchanged on financial markets
• Understand the impact of financial markets in our daily lives

1. What is it?
2. How has it been created?
3. From trading shares over the counter to high frequency trading

1. Present value
2. Create a business plan for a start-up
3. Internal rate of return
4. Asset with negative return: gold
5. Comparing investment projects

1. What is a bond?
2. Bond pricing
3. The yield curve
4. Corporate bonds, default risk and ratings
5. Perpetual bond
6. Holding period return

1. Equity vs. debt
2. Measures of return and risk
3. Company valuation and IPOs
4. Application of present value calculations to equity valuation

1. Diversification opportunities
2. Reduction in total risk
3. Time-varying correlations and diversification opportunities

1. The tulip crisis
2. The Internet bubble
3. The subprime crisis
4. And today?

1. Raising capital and economic efficiency
2. Crowdfunding, crowdlending & microcredit
3. Nick Lesson (Barings)
4. Jérôme Kerviel case (Société Générale)
5. Carbon market

1. Blockchain
2. Bitcoin
3. Ethereum
4. Ripple
5. NFTs
6. ICOs

1. Business case on TikTok

1. Zero-sum trade off vs positive
2. Instantaneous vs time
3. Linear vs nonlinear combinations
4. Purchasing power

1. Prepare your interview

   Compétence à acquérir :

   Students who complete this course successfully will:

   • Have a fair view on how financial markets are built and used nowadays
   • Understand why it is important to be knowledgeable on financial markets
   • Understand the trap of misinformation and question every financial situation
   • Identify and master the basic skills to succeed in the finance industry (or any industry by extension)
   • Have enough knowledge on the financial markets to enter more specialized financial courses

   Mode de contrôle des connaissances :

   • Many sessions will include non-graded assignments
   • One mid-term graded assignment will happen after session 5
   • A final assignment will happen at session 12
    
   This course has been designed to use real situations to illustrate all the concepts students need to understand.
   They may work on their own or in small group, may be evaluated by the teacher or by their peers.
    
    
   The numerical grade distribution will dictate the final grade. The passing grade for a course is 10/20.
    
   Class participation: Active class participation – this is what makes classes lively and instructive. Come on time and prepared. Class participation is based on quality of comments, not quantity.
   Exam policy: In the exam, students will not be allowed to bring any document (except if allowed by the lecturer). Unexcused absences from exams or failure to submit cases will result in zero grades in the calculation of numerical averages. Exams are collected at the end of examination periods.

   Bibliographie, lectures recommandées :

   Many books cover this subject.
   This course can be followed as it is, without any additional book.