What Does the GFMI Fundamentals of the Capital Markets Course Cover?
This one-day interactive capital markets course describes how capital markets operate and thoroughly examines the features and characteristics of the wide array of instruments traded in the market. The topics of equities and fixed income are focused on throughout the course and the use of derivatives is explained.
The fundamentals of economics and interest rates will be explored and their relationships to asset values are described. A broad overview of portfolio management will be covered and discussions of actively traded versus passive investment strategies will ensue. The last session of the course will focus on the equity markets and the impact electronic exchanges have had on the equity markets.
Capital Markets Course Objectives
By the conclusion of this course, participants will be able to:
- Explain how the capital markets operate
- Identify the main participants
- Discuss the impact the economy and interest rates have on asset values
- Distinguish between the various cash instruments
- Explain and demonstrate the use of derivatives
- Differentiate between exchange traded and over the counter markets
This course is broken down into six sessions to ensure that every topic is fully covered.
- Session 1: Introduction to Capital Markets will give a broad overview of the equity and debt markets, the goals of the markets, and how they work. The functions of Capital Markets, including raising capital, trading, and investment, and the differences between exchange traded and over-the-counter markets will be discussed. This session will explain the difference between primary and secondary markets, and will also define the major players. Participants will learn about the different regulators in the market.
- Session 2: Economics and Interest Rates begins with a review of the main components of Gross Domestic Product (GDP) and will discuss the impact of changes in these components on asset values. The role of the Federal Reserve will be explained and its impact on interest rates and other asset values will be analyzed. Current economic conditions and Fed policy will be covered in a group exercise.
- Session 3: Debt Markets and Their Instruments will teach participants how to differentiate between the debt and equity markets. A variety of debt instruments will be introduced and a discussion on how to use debt versus equity will be covered. An outline of the broad structure of debt markets as well as identifying the various market participants will be given.
- Session 4: Primer on Portfolio Management offers a broad overview on how investment portfolios are managed. Various benchmarks are introduced and active vs. passive management styles of investing are explained. The tools a portfolio manager uses to actively manage their portfolio, such as under/over weighting sectors will be identified and the concept of added return, or alpha, will be introduced.
- Session 5: Equity Markets and their Instruments will cover the more specific details of equity markets. Where stock trades are executed, the classification of companies, the different types of shares, and the major participants will be explored. The equity markets have changed greatly over the years and are predominantly electronically traded. Alternative Trading Systems (ATS) will be discussed and Electronic Communication Networks (ECNs) and dark pools will be explained.