Programme Content Part 1 (Compulsory Modules)

Securities, Futures and Options

Convenor: Professor Chris Brooks     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

Fixed Income and Equity Investments deals with the valuation of fixed income and equity securities. The module focuses on the basic characteristics of each security and the strategies used for approximating their fundamental value and assessing their risk. Its primary aim is to discuss how certain characteristics and relationships can affect the value of fixed income and equity securities and how they can be exploited to form optimal investment strategies.

Outline Content: An Introduction to Debt Markets; Bond Prices and Yields; Term Structure of Interest Rates; Interest Rate Risk; Active Bond Management; Credit Risk; Economic and Industry analysis; Financial Statement Analysis; Equity Valuation; Behavioural Finance and Technical analysis.

Quantitative Methods for Finance

Convenor: Professor Carol Alexander     Credits: 20

The objective of the module is to give students a thorough grounding in the essential mathematics required for their Part II modules. The course is focussed uniquely on financial applications, with all the main concepts illustrated by numerous examples and Excel spreadsheets. The very high practical content will make it accessible to all students, even those with little previous training in mathematics.

Outline Content: Foundations; Descriptive Statistics; Calculus; Linear Algebra; Probability Theory in Finance; Regression; Numerical Methods

Financial Markets

Convenor: Dr Alfonso Dufour    Credits: 20

The aim is to provide an economic framework for understanding the global financial system and global financial markets, financial institutions, market players and the importance of liquidity and price efficiency.  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; 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 municipal; 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.

 

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.