Understanding Financial Markets

Training Overview: This training will sharpen your analytical skills for understanding forces that determine prices of financial assets, derivatives and stocks. The training is divided into six parts: familiarizing participants with the basic structure of the money market; structure of the bond market (prices and interest rates); differences in exchange rate regimes including long term and floating rates; demonstration model on how short term exchange rates are determined simultaneously with interest rates in the loanable funds market; how stock markets function and how market agents assess the value of stocks; and finally, learn how market agents use derivatives such as futures, options, and swaps for hedging against risk or for speculating.

Goals:

• Understand financial market news.
• Understand how the collective action of the Central Bank, the banking system, and the public determine prices for financial and real assets.
• Understand business cycle forces that influence stock and bond prices and exchange rates.
• Highlight economic indicators relevant to design profit maximizing or loss minimizing strategies of your firm’s domestic or international operations in the immediate future.
• Use the derivatives markets to reduce risks of capital losses or to speculate for profit.
• Write a financial analysis.

Content:

• The Money Market.
• The Bond Market.
• The relationship between the Credit Market, Foreign Exchange Market, and the international flows of capital and goods.
• Exchange rate regimes & the foreign exchange market.
• The Stock Market.
• The Derivatives Market.

Training Methodology: 50% Theory, 50% Practical

This will be an interactive session, drawing from experience and prompting the participants to engage in discussions and analysis of case studies and the readings (provided by the trainer) as well as role-play activities carried out during the training.