Learning outcome

Students will be able to apply finance theory on the real estate market

Students will be able to perform mortgage calculations

Students will evaluate the profitability of real estate investments

Students will be able to analyse risks associated to real estate investments

Students will know of some macro and environmental factors which may affect real estate investments

Course Description

Specialised elements which will be covered:

• Short repetition of the main topics from 6008 Investment and Finance I, 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.

Assessment Methods

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

Two mandatory assignments (10%).

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