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DEPARTMENT OF INDUSTRIAL AND MANAGEMENT ENGINEERING
INDIAN INSTITUTE OF TECHNOLOGY KANPUR
Syllabus: Capital Markets & Financial Products (e-Masters in Financial Technology & Management)
Faculty 1
Faculty2
Department
Class Hours
Classroom
: Prof. Abhinava Tripathi (abhinavat@iitk.ac.in) and
: Mr. Vipin Chaudhary (vipin.chaudhary426@gmail.com)
: Industrial & Management Engineering
: 2-3.15 PM and 3.45-5.00 PM (Saturday)
: Online (e-Masters: https://ipearl.emasters.iitk.ac.in/login)
COURSE DESCRIPTION
1. Objective and Scope
Business organizations have to increasingly depend on capital markets to finance their operations in the
changing financial environment. The students majoring in finance must understand the functioning of financial
markets and various instruments offered/ traded in the market to mobilize finance for corporate activities and
hedging financial risk. Further, an in-depth understanding of the nature of each instrument as an investment vehicle
is of interest to students opting for a career with a financial intermediary. This course is structured around the
investment management process, which is essential to the users and the suppliers of funds. It strives to fulfill the
following objectives regarding the student’s knowledge and skills.
The course is practice-oriented, and the concepts learned during the course will be implemented and
demonstrated with R programming. While the programming aspect will enhance the comprehension of practice
implications, it will not affect the evaluation in any manner whatsoever. This compulsory course will cover the
capital and financial market structure and provide an overview of various products offered by these markets. The
structure of the Equity, Debt, Forex, Commodities, and F&O markets will be covered. An introduction to the
Indian Capital Markets, Mutual Funds, Insurance, Commodities, Forex, and Pension Funds will be provided.
2. Course Learning Outcomes
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To familiarise them with the working of capital markets
To equip them with valuation techniques for various instruments
To develop an appreciation of the risk-return behavior of securities/ instruments
Able to analyze the risk and return of portfolios
Understand how to construct and manage an equity and debt portfolio
Capital Markets & Financial Products
Abhinava Tripathi
IIT Kanpur
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3. Course Content
S. No.
Topic
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Financial Market Operations: Market microstructure (trading system design, shortselling, etc.), money markets and capital markets, instruments and interest rates, Theories
of market-microstructure: Limit order books and quote-driven markets; Market quality,
price discovery, and liquidity
Efficient Market Hypotheses and Behavioral Finance: Weak, semi-strong, and
strong form of efficiency; Overreaction and Underreaction hypothesis; Effect of
investor sentiment on security prices
Introduction to Fixed Income Securities (Bonds, Notes, etc.): Yield-to-maturity
computation, valuation of fixed income securities; Term structure of interest rates,
introduction to forward contracts
Mutual Funds and Portfolios: Portfolio Optimization in the Mean-Variance
Framework – Correlation, covariance, diversification, Portfolio Performance AppraisalClosed-end and open-end funds, index funds, ETFs; Performance measures (Sharpe
ratio, Treynor's measure, Jensen's alpha), performance measurement with downside risk,
Selection, and timing
Capital & Money Markets: Primary and Secondary Markets, Right Issues, Trading
Venues, Including Exchanges and Alternative Trading Venues, Money market
instruments
IPOs and Private Placements: Role of Investment Banks (IB) in raising capital,
Primary Market Transactions, IPO, Private Placements
Introduction to Derivatives: Risk management with futures & options (Call, Put),
pricing of derivatives; Put-Call parity, creation of synthetic options, commodity markets
Modern Instruments: Carbon markets and energy securities, cryptocurrencies, ESG
funds, Green funds, Socially Responsible funds
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5
6
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8
No of
Lectures
2
2
2
2
2
2
2
2
4. Prerequisite
None
5. Course Material
S. No.
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Name of Authors/Books/Publisher/Edition
Brealey, Myers, Allen; “Principles of Corporate Finance,” McGraw Hill
Education., 12th Edition.
Elton & Gruber, “Modern Portfolio Theory,” Wiley, 9th Edition
Reilly, Frank, K., “Investment Analysis and Portfolio Management,” 5th Edition,
Dryden.
Capital Markets & Financial Products
Abhinava Tripathi
Year of
Publication /
Reprint
2018
2014
2017
IIT Kanpur
3
6. Reference Text Books
S. No.
Name of Authors/Books/Publisher/Edition
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Mishkin & Eakins, “Financial Markets and Institutions,” Pearson, 9h Edition.
John C Hull, “Options, Futures, and other Derivatives,” 10th Edition
Frederic S. Mishkin, “The Economics of Money, Banking and Financial Markets,”
11th Edition
Year of
Publication /
Reprint
2018
2018
2017
7. Requirements and Grading
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Attendance Policy: As per the academic office
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Evaluation Policy: The weights are only tentative and may vary as per the progress of the course.
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Assignments & Projects (20%-40%): Detailed instructions about the assignment will be provided
during classroom discussions.
Quizzes (20%- 40%) : There will be 8-12 surprise quizzes, out of which the best 5-8 may be
considered.
End-Term Exam (40%-60%): As per the schedule of the e-Masters Program.
Final Grades will be based on the individual's relative performance in the class
8. Make-up exams:
o DOAA guidelines on make-up exams will be followed.
o There will be no make-up exam for the quiz component.
Capital Markets & Financial Products
Abhinava Tripathi
IIT Kanpur