Programme Content Part 1 (Compulsory Modules)

Securities, Futures and Options

Convenor: Professor Chris Brooks and Dr Marcel Prokopczuk Credits: 20

Introduces techniques for analysing and valuing different classes of risky assets. It also develops ways of optimally selecting portfolios of such assets and develops models of how these portfolios may be priced in financial markets. The techniques introduced in this module are widely applied in other elements of the programme.

Outline Content: Financial assets and investing in securities markets; Investors and their objective; Risk and capital allocation; Optimal portfolio selection; Capital asset pricing model; Single index and multifactor models; Arbitrage pricing theory; Derivative securities and the no-arbitrage principle; Forwards and Futures contracts (simple hedging); Options basic properties and trading strategies; Option pricing.

Fixed Income and Equity Investments

Convenor: Dr George Alexandridis and John Evans    Credits: 20

Applies general valuation methods to specific financial instruments: fixed income and equity securities. It describes the basic characteristics of each security and develops practical strategies for finding its value and assessing its risk. It develops general trading strategies for each type of security. It also considers how the markets for these securities are related and begins the task of showing how these relationships can be exploited to form an optimal investment strategy.

Outline Content:Sovereign and corporate bonds: Characteristics, prices and yields; The Term and risk structure of interest rate; Bond risk; Bond management: Active and passive strategies; Credit and credit default swaps; Securitisation; Top down fundamental management: Economic and industry analysis; Equity valuation I: Dividend growth, P/E ratios and earnings multiples; Financial statement analysis; Equity valuation II: Estimating share price and market strategies; Empirical evidence on market efficiency.

Financial Markets

Convenor: Alfonso Dufour    Credits: 20

Provides knowledge of global financial markets, the importance of liquidity, the distinction between exchange versus OTC markets, primary and secondary markets and the role of intermediaries in their various forms. Participants will gain an understanding of: international stock and bond markets, ‘repo’ markets (for borrowing/lending on a secured basis); an introduction to foreign exchange and money markets, and to futures markets (which are developed in more detail in optional Part 2 modules); finally specific markets for commodity and energy are studied in more detail.

Outline content: General introduction to world financial markets; Liquidity, the distinction between exchange versus OTC markets and the role of intermediaries in their various forms; Short-term debt securities issued by government and corporations; Classification of bonds according to issuer: government, agencies, corporate and municipa; Comparison of bond markets in major countries and a description of the main intermediaries and their role; Foreign exchange market – quotation conventions, types of brokers, central banks’ policies; Primary and secondary stock markets; Futures markets; Commodities markets; Energy markets.

Regulation, Risk Management and Compliance (Part 1)

Convenor: Deepa Govindarajan    Credits: 20

This 2 - part course is intended as an advanced study of the key challenges for risk management, regulation and compliance within the financial sector. We will begin by understanding the key risks posed by and to financial firms, markets and intermediaries. We will also examine the issues different stakeholders confront when interacting with financial firms. We will then evaluate how regulation helps address risk and ensure stakeholder interests are given due protection.

We will also study the role of the compliance and risk management functions within financial firms. The practical creation of risk management frameworks and compliance plans will be studied. The interaction between risk, management, compliance, internal audit and the business will be examined through practical classroom exercises and interaction with practitioners. 

Outline content: Financial firms, products and the role of intermediaries - Objectives, strategies and the key sources of risk; The oversight of risk - prudential and conduct of business issues, governance, culture, systems and controls, risk management frameworks, 3 lines of defences, the roles of risk management, compliance, audit and senior management, roles and responsibilities of audit and finance; The Theory and Practice of Financial Regulation - Historical context for regulation, the legal basis of regulation and "duties", regulation today and regulatory objectives including regulation of markets and traders, Basel 2, 3 and 4, Solvency 2, UCITS, MiFID, TCF, the regulatory handbook, the international regulatory context and regulation in the EU; Practical Issues in Risk Management, Audit and Compliance: risk management frameworks, key risk types, risk appetite, risk profile, risk tolerances, the constitution of the risk management function, building a compliance function and a compliance plan, testing compliance, Enterprise risk management, the practical challenges for risk management and compliance, delivering business value.

  

NB. All our Masters degrees comprise a total of 180 credits: 80 credits at Part One and 100 credits at Part Two. All modules are 20 credits except those marked with†, which are 10. Please note that module titles or content may vary each year.