Master's in Behavioural Finance

A master's-level education with particular focus on Behavioural Finance, an interdisciplinary field which integrates psychology and financial economics.

Finance in Action

At a glance

  • Specialise in one of the most exciting areas combining cognitive and behavioural psychology with finance
  • Benefit from the expertise of two leading schools in Finance and Psychology
  • Broaden your vocational knowledge and build a mixture of marketable quantitative expertise and soft skills
  • Experience a practice-centred delivery approach including hands-on sessions, case based learning and trading simulations
  • Study in the only UK Behavioural Finance postgraduate degree with a balanced curriculum in both disciplines
Level Master's
Award MSc
Duration 9 months / 12 months
Attendance Full-time
Location Whiteknights campus (Reading)
Programme Director

The purpose of behavioural finance is to identify and understand why people and investors make certain financial choices in a way that systematically affects market outcomes. Financial institutions are increasingly utilising behavioural finance in an attempt to understand investment patters and customer behaviours, hence behavioural finance graduates are in demand.

This is the first postgraduate degree in the UK with a thorough and balanced curriculum combining both disciplines. The study of finance and psychology progresses through the programme so that students obtain a critical grasp of core theory along with thorough knowledge, skills of application and analysis

Part 1

Compulsory modules Credits
The module provides the economic framework for understanding the global financial system and financial markets, financial institutions, market players and the importance of liquidity and price efficiency. Participants will gain an understanding of the international stock and bond markets, ‘repo’ markets (for borrowing/ lending on a secured basis). The module also introduces foreign exchange, money markets and futures markets (which are developed in more detail in optional Part 2 modules) and also focuses on specific markets for commodity and energy.
Teaching Staff

20

The objective of the module is to provide an overview of econometrics and in particular the analytical techniques used in finance. Via case studies and computer modelling exercises, students then learn how to apply these techniques to real data. Emphasis is placed on practical applications of the techniques in the global financial markets.

10

This module provides an overview of the key building blocks in modern finance theory and introduces techniques for analysing and valuing different classes of risky assets such as equities and derivatives contracts. It also develops ways of optimally selecting portfolios of such assets and develops models of how these portfolios can be priced in financial markets. The techniques introduced in this module are widely applied in other elements of the programme. The module includes simulated trading sessions in our state of the art dealing rooms, where participants are introduced to real world pricing and trading strategies (INVEST sessions).

Teaching Staff

20

Fixed Income and Equity Investments deals with the valuation of fixed income and equity securities. The module focuses on the basic characteristics of these securities and the strategies used for estimating 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 can they be exploited to form optimal investment strategies or for the purpose of conducting financial analysis. The analytical techniques introduced in this module are widely applied in other elements of the programme.
Teaching Staff
Christos Mavis Christos Mavis

20

The aim of the module is to introduce students to the scope and nature of psychology as a science relevant to the understanding of financial markets. The emphasis will be on acquiring knowledge and understanding thereby developing students’ transferable skills of analysis, evaluation and critical thinking. The content of the module offers a range of core topics with a strong focus on the scientific method and research practice. Students will be introduced to a number of core areas within psychology relevant to the study of human behaviour within finance, such as cognitive, social and biological psychology. Students will study some of the classical studies within psychology, as well as being introduced to newer topics. *We reserve the right to change this list should staffing or other changes in circumstance make it necessary.
Teaching Staff
Dr Philip Beaman Dr Philip Beaman

10

Part 2

Compulsory modules Credits
To give students a broad overview of research in behavioural economics and an understanding of how this research has been applied in real-life settings (e.g., public policy; marketing).
Teaching Staff
Rachel McCloy Rachel McCloy

10

Financial theories have traditionally assumed that rational, risk-averse investors trade in efficient and free-flowing asset markets. Academic research and practitioner experience have cast doubt on this paradigm, instead proposing that investors may not be utility maximisers, and that there may be impediments to the functioning of markets. This module will describe recent developments in the application of principles drawn from psychology to financial issues.
Teaching Staff

20

This course will examine the nature of human motivation by comparing different theoretical perspectives on motivation proposed in the literature. We will also briefly touch on the neural basis of motivation and possible applications to education to further expand our understanding of motivation.
Teaching Staff
Dr Ko Dr Ko

10

The aims of this module are: - To enable students to explore in depth and critically evaluate the evidence relating to the application of psychology in organisations to enhance well-being and performance; - To give students an awareness of current approaches to working with individuals and teams in ways that are integrated, based on research and aimed at delivering individual as well as organisational objectives;
Teaching Staff
Professor Patricia Riddell Professor Patricia Riddell

10

Students on the 9-month (12-month) programme can select 50 (30) credits from the following modules:

Optional modules Credits
The module objective is to give students a practical working knowledge of the pricing, hedging and trading of derivative securities, in particular options, via the use of trading simulations and pricing case studies/software. The emphasis of the module is on practical application and it is expected that by the end of the module students will understand and be able to analyse the time/risk dynamics of derivatives in a trading environment. Trading sessions are delivered in our state-of-the-art dealing rooms and utilising our bespoke trading simulation software ICTrader, offering exposure into real trading environment and the price formation process. Students will learn how to “think on their feet”, an essential skill in the investment banking industry.
Teaching Staff

20

The aim of the research project is to allow students to define and execute a piece of research in finance on a topic of their choice, with direction from an academic supervisor and with assistance from a doctoral student support supervisor.

Teaching Staff

20

Bond and Money Markets explores the economic drivers and relationships between bond, money markets and central bank monetary policies. The module offers students the opportunity to gain an understanding of how these connections affect funding liquidity management, trading strategies and the challenges faced by practitioners as well as regulators/policy makers. The course also covers the overall functions, structure and operation of the money market. The main aims of the module are to provide the tools for understanding the functioning of money markets, their connection with bond markets and central bank interventions, the fundamental determinants of interest rate markets and the commonly used trading strategies.
Teaching Staff

20

The main aim of the module is to provide a rigorous grounding of the theory and practice of corporate finance and more specifically the long-term financial management decisions of the firm pertaining to investments, financing and payout and how they affect its value. It deals with how corporations are governed, their financing structures, payout policies, the processes involved in the issuance of public and private equity, as well growing through inorganic investment (mergers and acquisitions). The module also extensively deals with advanced financial analysis and enterprise valuation methods employed by financial advisors/investment banks as part of advising corporations. Students on this module take part in a bespoke investment banking pitch-book simulation challenge whereby they have to work with their team and produce a real life pitch-book including financial analysis on a real transaction as part of assessing the company’s strategic alternatives.

Teaching Staff

20

This module aims to provide students with a detailed knowledge of the commodity derivatives markets. It examines the aspects of pricing and trading physical derivatives, with emphasis on the energy and shipping (freight) sectors. The course is designed using real-life trading examples, stimulating students, who wish to follow a sales and trading career, to approach derivatives pricing from first principles.

Teaching Staff

10

This module provides an overview of the purpose and operation of financial regulation, and the consequences of financial sector reform for different markets, including those of the students’ home country. The module aims to deliver a broad insight into the key challenges for financial regulation particularly in the light of changes to the financial architecture in the aftermath of the global financial crisis of 2007.
Teaching Staff

20

Fixed Income Cash and Derivative Markets applies more advanced valuation and risk assessment methods that build on the knowledge introduced in the fixed income component of the first term Fixed Income and Equity Investments module: It describes the basic characteristics of fixed income derivatives, structured products and credit sensitive securities and develops practical strategies for valuation and risk assessment. It also considers how the markets for these securities are related and begins the task of showing how these relationships can be exploited for trading or investment. The module is designed not only for students wanting a more advanced knowledge of the fixed income markets, but also for students wishing to take the exam for the ICMA Fixed Income Certificate (ICMA FIC)

Teaching Staff
Gail Rolland Gail Rolland

20

The objective is to introduce the students to programming and its usage for data processing and finance. It deals with how to write programming code, process files, receive input and provide output. Students who complete this course will be able to write programming code in Python, process files, input, output and manage data. Furthermore, students will be able to read and write to Excel and CSV files, connect to databases, obtain and process data from the Web, as well as use Python for Finance and Econometrics applications.

10

This module offers students a grounding in the use of qualitative research methods in psychology. It examines the complementary roles of qualitative and quantitative approaches in psychological research and introduces key methods for collecting and analysing qualitative data. Criteria for evaluating the rigour of qualitative research are considered
Teaching Staff
Dr Kate Harvey Dr Kate Harvey

10

Part 3 (12-month only)

Students on the 12-months programme should take 20 credits from the following:

Optional modules Credits

This module aims to provide students with an understanding of financial decision making in the context of the energy industry. The course will combine theoretical models with practical applications. It focuses on energy markets (products, companies, production and consumption), capital budgeting in energy companies, financing of energy companies, energy derivatives and trading in energy markets. A number of case studies in energy finances are utilised.

Teaching Staff

20

This module is designed for advanced Master’s students and doctoral students. It has a very high technical content. It aims to equip the students with the foundations of theoretical asset pricing and with the relevant skills for performing empirical tests. Additionally, a few important corporate finance topics will be covered in the format of student presentations. The objective of the module is to prepare students to become independent and quality researchers.

Teaching Staff

20

The module is less quantitative option open to all MSc students that builds on the coverage of futures contracts from term 1. By the end of the module it is expected that students will be aware of the different ways of constructing stock market indices and the implications of these differences, how futures contracts are traded and the identity of some of the close substitutes for trading index futures, how futures can be priced using an arbitrage relationship, how futures can be used for hedging the price risk of the underlying, and the various uses that fund managers make of these instruments.

Teaching Staff

20

Despite the volatile nature of the financial markets, demand for well‐qualified recruits remains high. Students schooled in the field of behavioural finance are in demand as investment banks, asset managers and associated industries attempt to understand investment patterns and pricing bubbles that cannot be explained by conventional finance theories. Thus, they have been showing increasing attention to behaviourally driven investment philosophies over the last few years. We expect many of our graduates to enter the industry at either the ‘Analyst’ level or as ‘Associates’, who tend to have several years of relevant professional experience.

Our graduates leave us equipped with knowledge and transferable skills that are also prized by employers outside of the traditional banking and finance sectors. Many of our Alumni are currently enjoying successful careers with multinational companies, consulting firms, government agencies and regulatory organizations throughout the world.Graduates will also gain the knowledge and skills required to continue their studies at the doctoral level.

Find out more about graduate destinations and career opportunities on our Henley Careers page

Our master's in finance courses are available only on a full-time basis with the option of studying for 9 or 12 months.

Learning options

Full-time: 9 months
Full-time: 12 months
Students will be resident and undertake full-time study in the UK. Under both, the 9 and 12-month programmes students take compulsory and/or elective modules in Part 2.
The 12 month option involves taking an elective 20 credit module between July and August, which would also mean a 20 credit reduction in the number of taught modules taken in the spring term.

Course structure

October – December:Part 1 Autumn Term
January:Part 1 Exams
January-April:Part 2 Spring Term
May – June:Part 2 Exams
June – August (12 month programme only):Part 3
August/Sep (12 month programme only):Part 3 Coursework deadlines

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Contact us

For any questions of academic nature about this programme you are welcome to contact directly the Programme Director, Dr Ioannis Oikonomou at i.oikonomou@icmacentre.ac.uk

Admissions

If you have any questions about admissions, please don't hesitate to contact us.

Email: admissions@icmacentre.ac.uk
Telephone: +44 (0)118 378 6497

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