Capital Market Analysis
The module examines the equity asset class as an example of a long term, generally risky, financial security. Since semester two specialist modules in fixed interest securities and derivatives are available, this module provides only a basic introduction to these other classes of financial instruments.
The module looks at the way performance of an investment in equities is characterised, and how such investments have performed in the past. The processes of equity portfolio construction, management and performance measurement are then examined. The perspective adopted is that of the purchaser, not the issuer, of equity.
The module examines the ethical and practical justifications for the idea that companies should operate in the interests of shareholders and also the counter arguments in favour of a stakeholder perspective.
The module then deals in turn with the major financial decisions made in organisations (capital budgeting, capital structure, dividends, mergers, working capital). Decisions are analysed first in the context of well functioning capital markets. Capital market imperfections and behavioural biases on the part of managers and investors are then considered.
The module covers :
- forward and futures contracts; how they are traded and used for hedging
- stock price modelling
- derivatives; European and American styles
- derivative valuation; Binomial trees, Trinomial trees, Monte-Carlo, Black-Scholes
- stock indices, futures on stock indices; options on futures
- compound options and real options
Fixed Interest Investment
The module covers:
- institutional framework of international and UK bond markets
- bond yield and pricing models
- interest rate determination
- bond market strategies and portfolio decision making
Quantitative Techniques for Finance
The module provides you with a good understanding of econometrics tools covering topics such as time series, qualitative response and panel data models with finance-related applications.
Research Methods for Finance and Investment
Part 1: Introduction to quantitative methods
This part of the module will teach you concepts in matrix algebra, optimisation, statistical distribution theory and regression analysis.
Part 2: Introduction to qualitative research
This part of the module will be concerned with epistemological issues as well as the collection and analysis of qualitative data.
Behavioural Economics and Decision Making
The module is split into two parts. The first part focuses upon the methods and models associated with behaviour. These sessions will introduce key concepts in bounded rational behaviour and apply these to specific economics models and financial markets.
The second part of the module concentrates on designing your own experiment and interpreting empirical results. You will analyse studies of bounded rational behaviour, labour markets, asset markets, experimental behavioural finance, social dilemmas, preferences, public goods, reciprocity, bargaining and contests.
The module will be interactive, you will undertake experiments and analyse results.
The module provides you with a knowledge and understanding of key practical applications of finance using standard computer software. Students taking the module are assumed to have prior background knowledge of financial markets and financial econometrics.
It equips you with computational and programming skills, allowing you to analyse financial data, build financial models and solve complex financial problems. The module will also integrate application areas in finance which have already been introduced, or which are being introduced to you concurrently.
- Basic R and/or Python commands
- analysing and visualising financial data
- modelling and forecasting financial time-series
- applications relevant to asset pricing and portfolio analysis
The module will provide an introduction to modern econometric techniques for modelling financial data. It covers relatively advanced econometric techniques such as dynamic panel data modelling, generalised methods of moments, multinomial models, selection models GARCH, risk measurement and continuous time models.
The module covers:
- financial reports
- regulation of financial reporting
- creative accounting
- techniques of accounting analysis
- standard setting
- relationship to capital
- accounting research
The module uses a game-theoretic approach to analyse strategic firm-behaviour. It intends to cover topics like static and dynamic models of imperfect competition, product differentiantion, market entry, merger and acquisition, and privatisation.
This module examines contemporary developments in the theory and practice of international financial management. It includes analysis of foreign exchange markets and international financial markets, including international banking and the Euromarkets.
Emphasis is placed on discussion of risk management techniques to protect against both currency and political risks. Both long term international investment and financing decisions and short-term exporting decisions form part of the module.
Monetary and Financial Economics
The module will cover:
- the behaviour and term structure of interest rates and their link with financial instruments
- the definitions of money and determinants of the money supply
- tools and conduct of monetary policy
- the role of the central bank in monetary policy and the role of the banking sector
- bank reserves and monetary policy
- exchange rates and banking
- economic models using ISLM and ADAS
Quantitative Risk Management
The module covers:
- the development of quantitative risk management and its use by firms to measure and manage their risk
- measures of risk: value at risk, expected shortfall, and other risk measures
- uses of quantitative risk measures: estimating risk measures - historical simulation approaches, parametric approaches and Monte Carlo simulation approaches
- volatility forecasting
- estimating liquidity risks
- backtesting risk models
- risk measurement using Extreme Value Theory
- model and parameter risk
Risk Management in Financial Institutions
The module covers risks specific to financial institutions (including liquidity, credit, market, and operational); techniques for managing such risks; the organisation of the risk management process in financial institutions. Financial institutions include banks, other deposit-taking institutions, life and general insurance companies.
Content complements that covered in modules such as Corporate Risk and Quantitative Risk Management.
Venture Capital and Private Equity
The module covers venture capital and private equity provide risk capital to firms at various stages of their life-cycle. This involves selecting investments, structuring deals, valuation of investment opportunities, leveraged buyouts (LBOs), managing portfolio firms, and exit.
The modules we offer are inspired by the research interests of our staff and as a result may change for reasons of, for example, research developments or legislation changes. This list is an example of typical modules we offer, not a definitive list.