Investments and Financial Markets


This curricular unit presents the various financial instruments and markets where they are traded. It describes investor behavior, explaining how investor preferences influence the choice of the optimal asset portfolio. The characteristics of several financial instruments are studied, establishing the relationship between their expected profitability and risk.


  1. Investor Objectives
  2. Markets and types of financial investment
  3. Choice of the optimal portfolio
  4. Factors Model
  5. Capital Asset Pricing Model --- CAPM
  6. Arbitrage Pricing Theory --- APT
  7. Valuation of financial assets: bonds, shares, options.


  • Pires, C.P., Mercados e Investimentos Financeiros, Escolar Editora, 3ª edição, 2011.
  • Bodie, Z., Kane, A. and Marcus, A., Essentials of Investments, McGraw-Hill, 2008.
  • Sharpe, W., Alexander, G. and Bailey, J., Investments, Prentice Hall, 1999.
  • Ross, S., Jaffe, J. and Westerfield, R., Corporate Finance, McGraw-Hill, 2008.
  • Grinblatt, M. and Titman, S., Financial Markets and Corporate Strategy, McGraw-Hill, 2002.