Courses NonDegree Display 2021-2022
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| Course title | Macroeconomics and Finance | |||||||||||||||||||||||||||||||||||||||
| Course code | EBC2001 | |||||||||||||||||||||||||||||||||||||||
| ECTS credits | 6,5 | |||||||||||||||||||||||||||||||||||||||
| Assessment | Whole/Half Grades | |||||||||||||||||||||||||||||||||||||||
| Period |
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| Level | Introductory | |||||||||||||||||||||||||||||||||||||||
| Coordinator |
Diogo Sampaio Lima For more information: d.sampaiolima@maastrichtuniversity.nl |
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| Language of instruction | English | |||||||||||||||||||||||||||||||||||||||
| Goals |
* Understand and use the concepts of nominal, real and effective exchange rates
* Understand and use arbitrage (parity) relations in foreign exchange * Understand and use short-run and long-run exchange rate determinants * Understand and use a simple IS-LM-FX model for a small open economy under fixed and floating exchange rates * Understand and use the IS-LM-FX model for short-run macroeconomic policy analysis * Understand and use the differences and similarities between a fixed exchange and a monetary (currency) union * Compute the return and volatility of stocks and portfolios of stocks * Understand the (theoretical) trade-off between risk and return, and how to select an efficient portfolio * Understand the (assumptions behind the) CAPM and its practical use * Estimate CAPM betas for different industries using time series data and their relation to risk-return trade-offs * Compute the cost of capital for a firm or an investment opportunity * Understand multifactor models of risk, e.g. the Fama-French-Carhart model * Compute the value of a firm and understand the Law of One Price * Understand the (assumptions behind the) Modigliani-Miller (MM) theorem * Understand how deviations from MM affect the optimal capital structure * Understand the valuation and use of financial options in risk management |
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| Description |
In this course, we focus on a limited number of specialized topics in international macroeconomics and finance. These are:
* Short-run and long run determinants of the exchange rate and the role of the exchange rate as an adjustment mechanism between countries * The effectiveness of monetary and fiscal stabilization policies in open economies under fixed and floating exchange rate regimes * The special case of a currency union: the euro area * The role of risk and return in asset pricing and optimal portfolio composition * The determinants of the choice between debt and equity (capital structure) in funding a firm’s operations * Financial risk management and the use of options |
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| Literature |
* Berk & DeMarzo, Corporate Finance, Pearson, 4th ed., 2017
* Feenstra R.C., A.M. Taylor, International Macroeconomics, MacMillan, 4th (int’l) ed., 2017 |
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| Prerequisites |
Students are expected to be familiar with the standard concepts taught in 1st year undergraduate Macroeconomics and Finance courses.
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| Teaching methods (indicative; course manual is definitive) | PBL / Presentation / Lecture / Assignment | |||||||||||||||||||||||||||||||||||||||
| Assessment methods (indicative; course manual is definitive) | Participation / Written Exam / Presentation | |||||||||||||||||||||||||||||||||||||||
| Evaluation in previous academic year | For the complete evaluation of this course please click "here" | |||||||||||||||||||||||||||||||||||||||
| This course belongs to the following programmes / specialisations |
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