Capital Markets Course 1. Capital Markets- Introduction Assessment: 40% seminar assessment 60% final assessment Bibliography: Anghelache, G., Piaţa de.

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Capital Markets Course 1

Capital Markets- Introduction Assessment: 40% seminar assessment 60% final assessment Bibliography: Anghelache, G., Piaţa de capital în context european, Editura Economică, Bucureşti, 2004 Bodie, Z., A. Kane, and A. J. Marcus, Essentials of Investments, 6th edition, McGraw Hill International Edition, 2007 Grigore, A., Piee de Capital, Editura ASE, 2010 For each course the needed bibliography will be indicated

Capital Markets - Objective Acquiring the main approaches, concepts, methods and tools of analysis established in the literature and practice on capital markets and the investment process.

Capital Markets – Course structure 1Introduction to the study of capital markets: recent trends, participants, financial intermediaries, types of instruments, indicators characterizing the capital market. 2Primary and secondary capital markets. Romanian capital market. 3Equity valuation. Equity capital modification. Fundamental analysis: types of equities, Equity rights. Dividend policy. 4Equity valuation. Technical analysis: fundamental vs. technical analysis, Efficient Market Hypothesis, patterns and types of charts, specific indicators. 5Risk and return on the capital market: Measuring return and risk of financial instruments. Historical return vs. expected return, standard deviation, variance, semivariance. 6Bond pricing: technical aspects, types of bonds, bond pricing, bond yields, default risk and rating of bonds, bond rate sensitivity, convexity. 7Stock exchange rates, stock exchange orders. Bucharest Stock Exchange; spot market 8Trading on capital markets. Buying on margin and short selling: marking to markets, determining returns. 9Derivatives. Futures and forward contracts: basics, mechanics of trading, types of strategies, determination of the futures price. 10Derivatives. Options: technical aspects, determining payoffs for standard options, types of trades with options. Option strategies (straddle, strangle). 11Stock Exchange Indices: types of indices, determination of the value of an index, effects of the financial crisis on capital markets 12Investment funds: types of investment funds, investment policies, performance indicators.

I. Capital Market - Characterization Capital market: all relations and mechanisms through which the temporarily capitals available in the economy are directed to those who need these funds - Investors - Issuers  Securities The connection: made by the financial intermediaries

I. Capital Market - Characterization !Recap! Capital Market Anglo-Saxon Concept Continental-European Concept Romania: Anglo - Saxon Concept: the capital market is the part of the financial market; it linked the issuers and the investors Capital market: ensure the direct financing (alternative for intermediate investment)

I. Capital Market - Characterization Financial Intermediaries IssuersInvestors Capital DemandCapital Offer Securities/ Founds Founds/ Securities

I. Capital Market - Characterization Capital demand Debtors: function of activity function of purposes Capital demand: - Structural - Temporary

I. Capital Market - Characterization Capital Offer Investors: - Individual investors: - pasive management - active management - Professional investors

I. Capital Market - Characterization Capital Market Structure Regarding the issuing and selling the securities: - primary market - secondary market Regarding the underlying asset - Stock Market - Bonds Market - Term Contracts Market - Options Market

I. Capital Market - Characterization Regarding the price settlement mechanism - direct search markets - brokered markets - dealer markets - auction markets Regarding the settlement moment - spot market - term market

Net Capital Flows Companies Financial InstitutionsCapital Market Public AdministrationHouses

Bibliography Anghelache, G., Piaţa de capital în context european, Editura Economică, Bucureşti, 2004 Bodie, Z., A. Kane, and A. J. Marcus, Essentials of Investments, 6th edition, McGraw Hill International Edition, 2007