Please note! Course description is confirmed for two academic years (1.8.2018-31.7.2020), which means that in general, e.g. Learning outcomes, assessment methods and key content stays unchanged. However, via course syllabus, it is possible to specify or change the course execution in each realization of the course, such as how the contact sessions are organized, assessment methods weighted or materials used.

LEARNING OUTCOMES

In this course we learn about the functioning of financial markets and how hedge funds and other sophisticated investors trade in stocks, bonds, foreign exchange and commodities to generate abnormal returns. We start by examining the existing theory of how financial markets work and later look how it relates to investors' quantitative trading rules and optimal portfolio management. By the end of the course the students will be able show detailed understanding of the theory of financial markets under perfect and under imperfect information and how this theory applies to finding investment opportunities with abnormal returns in practice. 

Credits: 6

Schedule: 01.03.2021 - 16.04.2021

Teacher in charge (valid 01.08.2020-31.07.2022): Matti Suominen

Teacher in charge (applies in this implementation): Aleksi Pitkäjärvi, Matti Suominen

Contact information for the course (applies in this implementation):

CEFR level (applies in this implementation):

Language of instruction and studies (valid 01.08.2020-31.07.2022):

Teaching language: English

Languages of study attainment: English

CONTENT, ASSESSMENT AND WORKLOAD

Content
  • Valid 01.08.2020-31.07.2022:

    Financial markets under perfect information: risk aversion and portfolio choice. Dynamic hedging and pricing of redundant assets. Financial markets under imperfect information: supply and demand for risky assets under imperfect information. Liquidity provision in financial markets. The course looks at the modern theory of financial markets and the empirical evidence related to the phenomena discussed. It shows how the financial marlet imperfections lead to predictability in securities returns that hedge funds utilize. We rationalize several of the common quantitative trading strategies that hedge funds use. 

Assessment Methods and Criteria
  • Valid 01.08.2020-31.07.2022:

    1. Lectures 24 h, class participation (10%)
    2. Exercises
    3. Final exam (90%), or alternatively an extensive individual project

     

Workload
  • Valid 01.08.2020-31.07.2022:

    Lectures 24 h
    Class preparation 48 h
    Exercise preparation 50 h
    Exam preparation 36 h
    Exam 4 h

DETAILS

Study Material
  • Valid 01.08.2020-31.07.2022:

    Material provided by the lecturer

Prerequisites
  • Valid 01.08.2020-31.07.2022:

    Rahoituksen perusteet or Principles of Corporate Financial Management,
    Investment Management, Recommended but not needed: Derivatives and Fixed Income, Portfolio Management

SDG: Sustainable Development Goals

    1 No Poverty

    8 Decent Work and Economic Growth

FURTHER INFORMATION

Description

Registration and further information