Financial Market Analysis

Financial Market Analysis

This online course, presented by the IMF’s Institute for Capacity Development, introduces participants to the fundamentals of financial analysis that are part of the toolkit of policymakers. These tools are used to study the characteristics of various financial instruments and their pricing, and to analyze portfolios of assets and the basics of risk management. Mastery of these tools is considered essential for participants to take part in more advanced and policy-oriented courses offered by ICD in finance or macro-financial areas. Topics covered in the FMAx include pricing of fixed income securities and equity; the term structure of interest rates; portfolio allocation and diversification; and an introduction to risk management.

Course Objectives: Upon completion of this course, participants should be able to:

• Price a variety of financial assets (money market instruments, bonds, and equities) using the present value (PV) principle.
• Measure and compare different yield measures for financial assets. 
• Construct and estimate a yield curve on the basis of readily available information, and interpret its behavior according to several theories.
• Relate differences in the valuation of single equities or markets with economic fundamentals. 
• Construct an optimal portfolio of risky assets using historical return data, and assess likely changes in its composition as a result of changes in macroeconomic conditions.
• Assess the market risk of an investment by calculating its Value at Risk (VaR), Stressed VaR, and Expected Shortfall, and evaluate the accuracy of past VaR by means of backtesting.


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