Knowledge and understanding:
The student learns the main features of the basic quantitative models and methods for the valuation of:
- Financial securities and credit instruments;
- Future cash flows (originated by financial securities, economic investments, enterprises, and so on);
- Term-structure of returns and prices of fixed-income securities.
He/she will learn how to use such models and methods.
The course deals with deterministic models only. The student also examines simple models for investments bearing financial risks, with particular regard to financial immunization in respect of interest rate risk.
Applying knowledge and understanding:
The student is trained in performing the basic quantitative assessments of financial securities and credit instruments, comparing market prices of fixed-income securities, setting a financial valuation problem or taking a decision based on financial criteria.
The course aims at developing the financial sensitivity and the ability for critical analysis which are expected from a student graduated in business economics and management, and who is employed in the financial sector, or deals with the financial management of commercial or industrial enterprises.
The student is educated in the use of the basic financial-quantitative language. He/she is able to interpret (and, if necessary, validate by autonomously developing appropriate calculations) the output of basic financial packages, as well as to describe them to third parties (such as users of financial services). Moreover, he/she is able to understand and describe the basic quantitative financial valuation criteria, commonly used for financial decision-making.
The student develops the ability to understand the financial problems and to select the most appropriate quantitative valuation models. The student learns how to adopt deterministic quantitative models, also in a stochastic framework. In this latter respect, he/she understands which simplifications must be assumed in order to obtain a quick solution and how to interpret the main findings in respect of such simplifications.