We have a test tomorrow about Financial Economics. The test contents are Portfolio Theory, Financial Markets and Valuation. So, we spent our time in this morning preparing for this test as indicated on the program schedule. It is a really great opportunity to learn about one of the most important issues that involve Corporation Decisions about buy or sell some assets, to invest money, to borrow money or to distribute dividends. As we can note, every decision made by the Companies is, direct or indirect, a financial decision.
So, after a lunch with the other students, from all over the world, we start our afternoon class in the Magdalene College, of the University of Cambridge, with the Professor Charles Roddie, who talked about the CAPM, the Capital Asset Pricing Model. It is about statistics and math. You can apply this model to evaluate a financial asset. It relates the return on the asset and the risk on this. The equation contains also a covariance with the market. It is really awesome learn about how the markets work and how the investments are made.
We ended our day by an event called Cultural Exchange. In an International Group of students like this, knowing about other countries is very funny. We may know about their customs, habits, literature, arts, music, fashion and gastronomy is an amazing thing.