2013/2014 KAN-CM_SU8P Trading and Exchanges
English Title | |
Trading and Exchanges |
Course information |
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Language | English |
Exam ECTS | 7.5 ECTS |
Type | Elective |
Level | Full Degree Master |
Duration | Summer |
Course period | Summer
Please check www.cbs.dk/summer for the course schedule. |
Time Table | Please see course schedule at e-Campus |
Study board |
Study Board for MSc in Economics and Business
Administration
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Course coordinator | |
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Main academic disciplines | |
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Last updated on 14-05-2013 |
Learning objectives | |||||||||||||||||||||
After this course students should
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Course prerequisites | |||||||||||||||||||||
It is recommended that students are familiar with basic finance issues (such as the NPV rule, the theory of portfolio selection and the CAPM) at the level of standard finance textbooks such as Brealey/Myers/Allen (Principles of Corporate Finance, 10th. edition, McGraw-Hill 2011), Ross/Westerfiled/Jaffee/Jordan (Modern Financial Management, 8th edition, McGraw-Hill 2008), Berk/DeMarzo (Corporate Finance, Addison-Wesley 2008) or similar textbooks. | |||||||||||||||||||||
Prerequisites for registering for the exam | |||||||||||||||||||||
Compulsory assignments
(assessed approved/not approved)
Mandatory Mid-term Assignment: The mid-term assignment will be a set of questions. Students will have to submit written answers to these questions. |
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Examination | |||||||||||||||||||||
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Course content and structure | |||||||||||||||||||||
Traditional asset pricing theory and investment analysis treat
the process of price formation as a black box. The actual structure
of financial markets does not play a role, and frictions and
transaction costs are disregarded. These issues, and market
liquidity in particular, are of enormous practical importance. This
is evidenced by the great attention regulators pay to issues of
financial market structure (e.g. the MiFID directive of the EU), as
well as by the attention market participants pay to trading costs.
In recent years, many new markets have been created in an attempt
to reduce transaction costs (e.g. the ATS in the US or Chi-X and
Turquoise in Europe). Much of the order volume in today's
markets is generated by computers rather than by human traders.
This phenomenon (termed algorithmic trading or high frequency
trading) has been accused of destabilizing markets, most
importantly in conjunction with the infamous 2010 "flash
crash".
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Teaching methods | |||||||||||||||||||||
The course will consist of lectures
with several short embedded case studies (about 60%), exercise
sessions in which we will discuss questions related to the contents
of the course (25%) and student presentations (about 15%).
Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings to be read before the start of classes with a related task or tasks in the first two classes in order to 'jump-start' the learning process. The preliminary assignment will be a short essay. The essay will be based on a set of required readings, and will be guided by a set of specific questions/issues to be addressed. The papers will be presented in class during the first week. |
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Expected literature | |||||||||||||||||||||
Required course readings and literature:
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