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Global Financial Markets and Instruments
  • Level Foundation
  • Duration 20 hours
  • Course by Rice University
  • Offered by

About

Get a running start in the high-stakes world of financial investment! This first course is designed to help you become an informed investor by providing you with the essential concepts for long-term success in managing money. You'll start by learning the role of financial markets and financial assets in a well-functioning economy. From there, you'll learn about the wide range of financial instruments available in major asset classes, their features and valuations. You'll explore how financial markets actually operate in the real world, focusing on how and where securities are traded and how various market types differ from one another in practice. You will also learn the basics of algorithmic trading, dark pools, buying on margin and short selling. By the end of the course, learners will be able to: - List and distinguish the different financial instruments available to an investor - Compare global financial markets - Explain the features of equity, debt, and derivative instruments - Define traditional and alternative asset classes - Discuss different trading venues and mechanics of securities trading - Discuss the current trends affecting today's financial markets This course is designed to be accessible for students of all knowledge levels and gives you the actionable foundation needed to manage money in a post-crisis world. ________________________________________ WEEK 1 Module 1: Introduction & Review of Elementary Finance Tools This module introduces the Investment and Portfolio Management Specialization, which is made up of four courses. This module discusses how the first course, Global Financial Markets and Assets, is organized. It outlines the different stages of the investment management process, which guides the focus of the Specialization. It also reviews basic finance concepts and tools such as time value of money, computing returns, discounting and compounding. Topics covered include: - Familiarize with the organization of the class - Meet the professor and your peers - Explain the investment management process - Review elementary concepts in finance - Compute present value or future value of a single cash flow - Compute present value of future value of a stream of cash flows - Define an annuity or perpetuity - Apply time value of money tools to solve basic mortgage, loan or retirement problems ________________________________________ WEEK 2 Module 2: Financial system & financial assets: fixed income securities In this and the next two modules, we cover the key institutional features of financial markets and instruments. We ask the following questions: Why do financial markets exist? What role do they play? What are financial assets and how are they different than real assets? How does it all come together? Basically, this is where I hope you will get to see the big picture of the entire financial system and how it comes together. Module 2 focuses on fixed income securities. We'll get started with a review of basics of bond valuation. You will learn about short-term money market instruments, U.S. Treasury securities as well as corporate bonds. After module 2, you will be able to describe fixed income securities, be familiar with their institutional features, and identify their cash flows. Finally, you will learn how to value fixed income securities such as Treasury bills, zero-coupon or coupon-bonds and compute yields. Topics covered include: - Explain the roles of financial markets - Distinguish between real and financial assets - Define and explain money market instruments, zero-coupon and coupon- bonds and features - Identify the cash flows associated with fixed-income securities - Define and explain bond market features - List the different types of Treasury securities and explain pricing and quoting conventions - List and define other long-term debt instruments such as corporate bonds, mortgage-backed securities, sovereign debt - Find the value of a zero-coupon or coupon-bonds ________________________________________ WEEK 3 Module 3: Financial system & financial assets: equity securities and derivatives In Module 3, we continue our overview of financial markets and instruments. We next focus on two other major asset classes: equity securities and derivative instruments. You will learn about how equity differs from fixed income securities, the cash flows associated with stock and preferred stock and how to find the value of a share. You will also learn about option strategies. After completing module 3, you will be able to describe all major asset classes, including derivative instruments such as options, forwards and futures. You will be able to explain how these differ from each other and their payoffs. Topics covered include: - Distinguish between equities and fixed income securities - Define and explain the features of equity securities - Identify the cash flows associated with equity securities - Explain dividend discount model - Find the value of a share of common stock or preferred stock - Define and list different types of derivative securities - Explain option payoffs - Distinguish between a forward and futures contract - Explain forward and futures payoffs - Identify traditional and alternative asset classes ________________________________________ WEEK 4 Module 4: Organization of financial markets and securities trading In this module, we discuss how financial markets actually work. We will talk about different trading venues and the mechanics of securities trading. I will emphasize a lot of terminology and the latest trends in securities trading to familiarize you with the institutional workings of financial markets. After this module, you will be able to compare different trading venues, trading mechanisms, and be able to explain different types of orders, including transactions like margin buying and short- selling; you will be familiar with the language and terminology you need in order to become an informed practitioner of investments. Topics covered include - Explain the roles of corporations, households, government, and financial intermediaries in the financial system - Explain price discovery process - Define different type of orders - Distinguish between dealer vs. auction markets; different trading platforms - Explain margin buying and short-selling transactions - Understand the current trading environment such as algorithmic or high frequency trading, dark pools etc.

Modules

Welcome and Introduction

    • 3 Videos
    • 5 Readings
    • 2 Discussion
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2 Discussions

  • Introductions
  • Share with others your goals

3 Videos

  • Introduction and welcome to the class
  • Meet the Professor!
  • What is the investment management process?

5 Readings

  • Course syllabus
  • Meet & Greet: Get to know your classmates
  • Grading Policy
  • How to use discussion forums
  • Pre-Course Survey

Review of elementary finance tools (Part 1): Time value of money

    • 3 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Review of Elementary Finance Tools Part 1

3 Videos

  • Back to basics (Part 1.1): What is time value of money?
  • Back to Basics (Part 1.2): Finding the future value of a cash flow
  • Back to Basics (Part 1.3): Finding the present value of a cash flow

2 Readings

  • Lecture handouts: Review of Elementary Finance Tools Part 1
  • Review of Elementary Finance Tools Part 1- Quiz Solutions

Review of elementary finance tools (Part 2): Valuing streams of cash flows

    • 4 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Review of Elementary Finance Tools Part 2

4 Videos

  • Back to basics (Part 2.1): What are annuities?
  • Back to basics (Part 2.2): Annuities example: Retirement problem
  • Back to basics (Part 2.3): Finding the present value of annuities
  • Back to basics (Part 2.4): Annuities Example: Loan Problem

2 Readings

  • Lecture handouts: Review of Elementary Finance Tools Part 2
  • Review of Elementary Finance Tools Part 2- Quiz Solutions

Review of elementary finance tools (Part 3): Effective interest rates and compounding periods

    • 4 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Review of Elementary Finance Tools Part 3

4 Videos

  • Back to basics (Part 3.1): Computing the effective annual interest rate
  • Back to basics (Part 3.2): Computing an effective rate over any period
  • Back to basics (Part 3.3): Examples, examples, and more examples
  • Back to basics (Part 3.4): Computing continuously compounded rates

2 Readings

  • Lecture handouts: Review of Elementary Finance Tools Part 3
  • Review of Elementary Finance Tools Part 3- Quiz Solutions

Review of elementary finance tools (Part 4): Perpetuities, growing perpetuities and growing annuities

    • 2 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Review of Elementary Finance Tools Part 4

2 Videos

  • Back to basics (Part 4.1): Valuing perpetuities and growing perpetuities
  • Back to basics (Part 4.2): Valuing growing annuities

2 Readings

  • Lecture handouts: Review of Elementary Finance Tools Part 4
  • Review of Elementary Finance Tools Part 4- Quiz Solutions

Summary

    • 1 Videos
    • 1 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Module 1: Review of Elementary Finance Tools

1 Videos

  • Using elementary finance tools – Summary

1 Readings

  • Review of Elementary Finance Tools- Graded Quiz Solutions

Listen to an Industry Expert (optional)

    • 1 Readings
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1 Readings

  • Listen to Bloomberg's Masters in Business: Interview with Vanguard CEO Bill McNabb

Introduction

    • 2 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • A primer on financial assets

2 Videos

  • Introduction: The role of financial markets as a time machine
  • A primer on financial assets

2 Readings

  • Lecture handouts: A primer on financial assets
  • A primer on financial assets- Quiz Solutions

Basics of Bond Valuation

    • 2 Videos
    • 3 Readings
    • 1 Assignment
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1 Assignment

  • Basics of Bond Valuation

2 Videos

  • Basics of bond valuation - Part 1
  • Basics of Bond Valuation Part 2

3 Readings

  • Lecture handouts: Basics of bond valuation
  • A note on bond valuation
  • Basics of Bond Valuation- Quiz Solutions

Fixed income securities: Money market instruments

    • 2 Videos
    • 3 Readings
    • 1 Discussion
    • 1 Assignment
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1 Assignment

  • Calculating Treasury Bill Prices

1 Discussions

  • Watching the Fed for a rate hike?

2 Videos

  • Money market instruments
  • Calculating U.S. Treasury bill prices

3 Readings

  • Lecture handouts: Money market instruments
  • Federal Reserve Bank's Open Market Operations (optional)
  • Calculating Treasury Bill Prices- Quiz Solutions

Fixed income securities: Long-term debt instruments

    • 2 Videos
    • 2 Readings
    • 1 Assignment
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1 Assignment

  • Long-term debt instruments

2 Videos

  • U.S Treasury securities
  • Other long-term debt instruments

2 Readings

  • Lecture handouts: Long-term debt instruments
  • Long-term debt instruments- Quiz Solutions

Summary

    • 1 Videos
    • 1 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Module 2: Financial assets - fixed income securities

1 Videos

  • Summing up fixed income securities

1 Readings

  • Financial Assets: fixed income securities- Graded Quiz Solutions

Equity securities

    • 2 Videos
    • 3 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Equity Securities

2 Videos

  • Equity Securities
  • Basics of equity valuation

3 Readings

  • A note on equity valuation
  • Lecture handouts: Equity securities
  • Equity Securities- Quiz Solutions

Derivative securities

    • 3 Videos
    • 4 Readings
    • 1 Assignment
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1 Assignment

  • Derivative securities

3 Videos

  • Derivative securities: Overview
  • Derivative Securities: Options
  • Derivative securities: Futures and forward contracts

4 Readings

  • Lecture handouts: Derivative securities
  • A note on option payoffs
  • An illustration of a foreign currency forward contract
  • Derivative Securities- Quiz Solutions

Summary

    • 2 Videos
    • 2 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Module 3: Financial assets - Equities and derivatives

2 Videos

  • Traditional vs. alternative asset classes
  • Summing Up equities and derivatives

2 Readings

  • Global Alternatives Survey (optional)
  • Financial assets: Equities and Derivatives- Graded Quiz Solutions

Introduction

    • 1 Videos
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1 Videos

  • Overview – Market structure: where rubber meets the road

Organization of financial markets

    • 2 Videos
    • 4 Readings
    • 1 Assignment
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1 Assignment

  • Organization of financial markets

2 Videos

  • Major players in financial markets
  • Primary and secondary markets

4 Readings

  • Roaring ahead: ETFs have overtaken hedge funds as an investment vehicle (optional)
  • ETFs Report: A market driven by 'speculators' (optional)
  • Lecture handouts: Organization of financial markets
  • Organization of financial markets- Quiz Solutions

How securities are traded? Trading mechanics

    • 4 Videos
    • 4 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Trading mechanics

4 Videos

  • Types of order
  • Margin transactions
  • Short sales
  • New trends in securities trading

4 Readings

  • Market declines: What is accomplished by banning short-selling? (Optional)
  • What caused the Flash Crash? (optional)
  • Lecture handouts: Trading mechanics
  • Trading Mechanics- Quiz Solutions

Summary

    • 1 Videos
    • 2 Readings
    • 1 Assignment
Show info about module content

1 Assignment

  • Module 4: Organization of financial markets and securities trading

1 Videos

  • Summary

2 Readings

  • Organization of Financial Markets and securities trading: Graded Quiz Solutions
  • End-of-Course Survey

Auto Summary

Embark on your journey in the dynamic world of financial investment with the "Global Financial Markets and Instruments" course. This foundational course, ideal for both beginners and seasoned investors, is crafted to equip you with the essential knowledge needed for long-term financial success. Led by an experienced instructor, this course dives deep into the role of financial markets and the variety of financial instruments available, including equities, debt, and derivatives. You'll gain a comprehensive understanding of how financial markets operate, the mechanics of securities trading, and the latest trends like algorithmic trading and dark pools. Over four weeks, the course covers: 1. **Introduction & Finance Basics** - Learn about the investment management process, time value of money, and basic finance tools. 2. **Fixed Income Securities** - Understand bond valuation, money market instruments, and various types of debt instruments. 3. **Equity Securities & Derivatives** - Explore equity valuation, dividend models, and the intricacies of derivative instruments. 4. **Financial Markets & Trading** - Discover different trading venues, order types, and the modern trading environment. With a total duration of approximately 20 hours, this course offers flexible subscription options, including Starter, Professional, and Paid plans, making it accessible for everyone. Whether you're looking to enhance your financial acumen or establish a solid foundation in investment, this course is your gateway to becoming a knowledgeable and strategic investor. Join now and take the first step towards mastering global financial markets and instruments.

Arzu Ozoguz
Instructor

Arzu Ozoguz