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MSc Investment Management
Programme Content Part 1 (Compulsory Modules)

• Securities, Futures and Options
• Fixed Income and Equity Investments
• Quantitative Methods for Finance
• Financial Analysis

Securities, Futures and Options

Convenor: John Board    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: 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.

Quantitative Methods for Finance

Convenor: Carol Alexander    Credits: 20

The objective of the module is to give students a thorough grounding in the essential mathematical methods used in finance, including basic principles of calculus, linear algebra, statistics, probability and regression. Students apply these skills to the fundamental problems in finance, such as compounding interest, pricing and hedging options, portfolio volatility, portfolio beta and simulation. The theory is 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: Foundation; Descriptive Statistic; Calculus; Linear Algebra; Probability Theory in Finance; Regression; Numerical Methods.

Financial Analysis

Convenor: John Evans    Credits: 20

Financial Analysis provides a comprehensive study of ‘top-down' fundamental analysis and then allows one to take this framework and apply it to the valuation of financial securities.  The first part of the course takes the student through macro-economics, micro-economics, industry analysis, financial statement analysis and the second part of the course focuses on financial statement analysis and then looks to apply this framework to the corporate valuation decision.  The final objective is to bring together these various disciplines into a single framework for analysis.

The analytical techniques taught in this course are very applied, to allow the successful candidates to apply directly to industry either the analysis section (as an equity analyst would do) or the usage of the relative value results as a fund manager or trader would do.

Outline content: Introduction and overview of the framework, and Markets and government; Aggregate demand, fiscal and monetary policy; Consumer demand and competitive markets; Industry analysis and regulation; The accrual concept and cash flows; Current assets and inventories; Long term assets; Long term finance; Business investments and combinations; Pensions and derivatives; Research project with presentation to class.