Introduction to financial markets

becge1117  2024-2025  Bruxelles Saint-Louis

Introduction to financial markets
4.00 credits
30.0 h + 15.0 h
Q2
Teacher(s)
Language
Dutch
Learning outcomes

At the end of this learning unit, the student is able to :

  • obtain knowledge about the financial markets: learn how to define and identify fundamental financial concepts, among which e.g. financial products.
  • understand financial economic newspaper articles (and reports) and explain them in their own words.
  • apply the theoretical concepts during exercise sessions during which financial problems will be solved (e.g. with respect to time value of money, the term structure of interest rates, pricing of financial instruments and the risk-return trade off) and graphical representations will have to be made.
 
Content
In a first part, money and the financial system will be introduced. In order to enable the pricing of financial instruments, the time value of money will be addressed. Present and future value calculations of a single cash flow, of cash flow streams, annuities and perpetuities will be taught.
Both money market (treasury bills, commercial paper, repo) and capital market products (bonds, stocks) will be discussed. We will go into the pricing and the risk of bonds and stocks.
Finally the importance of financial intermediaries is addressed, focussing on the structure of the financial industry, the depository institutions and the regulator.

Contents in detail:

Part 1: Introduction:
Why study money, banking and financial markets?
An overview of the financial system with a focus on the European and Belgian Markets
What is money?

Part 2: Financial Markets
The meaning of interest rates, annuities, perpetuities and loan tables
The behavior of interest rates
Risk structure of interest rates
Stock markets and the efficient market hypothesis

Part 3: Financial Institutions
An economic analysis of financial structure
An introduction to banking and general principles of bank management
Financial crises in advanced economies
Teaching methods
The lecture
During the lectures the theoretical concepts will be explained. Students will be encouraged to participate to class, answering to questions that will be raised.

TA sessions
Students will have the opportunity to solve problems under the guidance of an assistant. Students are encouraged to review the lecture before attending exercise classes.
Evaluation methods
During a two-hour written exam the knowledge of the theoretical concepts - presented during the lectures - as well as the ability of the student to solve problems related to those covered during the exercise sessions will be evaluated. It should be noted that for this course students are expected to follow the financial news. All documents (newspaper articles e.g.) that are mentioned in class will also be part of the exam material.
Other information
On the university’s electronic platform the following additional information will be offered:
- a copy of the slides used in class
- the exercises that will be solved during the exercise classes. Additional exercises will be added (partially with solutions).
Bibliography
Reference work : The Economics of Money, Banking and Financial Markets (11th Edition) (The Pearson Series in Economics) – Frederic S. Mishkin
Faculty or entity


Programmes / formations proposant cette unité d'enseignement (UE)

Title of the programme
Sigle
Credits
Prerequisites
Learning outcomes
Bachelor in Economics and Management (French-Dutch-English)

Bachelor : Business Engineering (French-Dutch-English)

Bachelor in Economics and Management [Dual Bachelor’s degree for the holder of a Bachelor in Law]