BFN403CAPITAL MARKET AND PORTFOLIO THEORY

BFN403 introduces students to the principles and practices of capital markets and portfolio management. The course explores the structure of capital markets, including the role of stock exchanges, bond markets, and financial instruments such as equities, derivatives, and fixed-income securities. Students will examine the principles of efficient market hypothesis (EMH), asset pricing models, and the role of financial markets in economic development and investment decision-making.

The course also covers modern portfolio theory, focusing on portfolio construction, diversification strategies, and risk-return trade-offs. Students will learn how to optimize a portfolio using quantitative techniques such as the Capital Asset Pricing Model (CAPM) and the Sharpe ratio. By the end of the course, students will be able to assess the risk and return of different investment opportunities, construct diversified portfolios, and apply portfolio theory in managing investments in both individual and institutional settings.