Course Objectives

The course mainly builds further on the topics covered in the course 5002, Investment and Finance. It is rather more advanced, theoretically, in that new topics such as derivative instruments for managing risks are included. In addition to the emphasis on theory, the course considers how to apply investment and finance theory practically to those applications that are particular to the property market. As a result, the course includes a large number of practical and applied problem approaches related to the property market.

Course Description

Specialised elements which will be covered:

• Short repetition of the main topics from 5002 Investment and Finance, that is, cash-flow, net present value, internal rate of return, basic interest rate calculations, and risk
• Value increases in the property market, yield level and the connection with macroeconomic conditions such as term structure of interest rates and the level of inflation.
• Financing of real estate, debt-equity ratio and risk
• Investment in real estate
• Risk factors in real estate.
• Derivative markets: Options and hedging strategies.
• Optimal financing of real estate.

Learning Methods

3-4 hours of lectures weekly during the autumn semester.

Assessment Methods

Final individual written examination, 4-5 hours. (90%)

Two mandatory assignments. (10%)

Minor adjustments may occur during the academic year, subject to the decision of the Dean