Macroeconomics and Finance

Doelstellingen van dit vak

* 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