MSc Behavioural Finance

Below is a list of programme modules that will be available in 2024/25, please note that some of these modules are new for the academic year. For any other modules which are available for both this academic year and next, follow the “More Information” link to see more.

The module aims to equip students with the main principles of Investment Theory. It begins with an overview of the interaction between users and suppliers of capital and the theory behind investor behaviour towards financial risk and reward.

This module focuses on fixed income and equity securities evaluation and provides an introduction to international financial markets and an overview of financial institutions.

Part I of the module 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.

This module equips you with the quantitative tools used by market participants. The module uses a mixture of (1) lectures where the theory and concepts are introduced and (2) seminars and workshops where we apply the knowledge to practical cases.

It is an introductory applied econometrics module with an emphasis on finance.

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. There will be a specific emphasis upon research in behavioural economics and the psychology of judgment and decision making and an understanding of how this research has been applied in real-life (business and finance) settings.

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.

This investment portfolio management module covers key topics, techniques and discussions, including investment styles, in relation to constructing and maintaining an optimal investment portfolio. The teaching approaches all topics from academic and market, practical perspectives. More detailed aims and learning outcomes are included below.

Students select one optional module each of the following baskets;

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.

The principal aim of the module is to familiarise students with the private equity (PE) and venture capital (VC) fund raising and investment process and with M&A deals. The purpose is to develop students’ appreciation of the practical aspects of investing by PE and VC firms, understanding the dynamics between the PE and VC investor and the entrepreneur, and also the practicalities of raising PE&VC funds from institutional investors and transacting M&A deals.

This real-world module prepares finance students for careers in risk, compliance, audit, regulation and in government / policy positions. Students explore how power, control and autonomy are moderated by regulation, how regulators can preserve or undermine the public interest, how regulators can demand and act in the interest of accountability, and how institutional, procedural and cultural safeguards can be created so the public interest is preserved.

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.

Over the past decade the importance of behaviour change in our society has become very apparent, however the theory underpinning behaviour change, its ethics and its efficacy, are not well understood. Understanding the scope of nudge, the role of motivation, and being able to apply successful strategies for behaviour change for the benefit of society is therefore important for future generations. Worldwide campaigns in relation to smoking, obesity and recycling are just some examples of such behaviour change initiatives. This module will help students to understand and evaluate theories, models and techniques for behaviour change including when, how and where to apply them appropriately, ethically and effectively, in order to formulate appropriate behaviour change strategies.

This module explores how financial investors incorporate sustainability considerations and environmental, social and governance (ESG) criteria into their investment decisions. The module offers an introduction to the main sustainable investment strategies, the main players (governments, supranational institutions, corporations, investment funds, banks) in the sustainable investment space and the application of sustainable investment in different asset classes.

This module prepares students for careers in finance. It is also useful for those considering careers in government or in multilateral organisations.

The module encourages the development of critical perspectives on whether and why ethics matter. Students will explore why ethical decision-making in finance matters, given the extent of power that is moderated by global finance.

The main aims of the module are to provide the tools for understanding the functioning and pricing 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 and portfolio management strategies.

This module introduces students to the theory and practice of governance with a particular emphasis on corporate governance. The module then focuses on a critical discussion of power and accountability, with a particular focus on corporate power and corporate accountability to societal stakeholders

Building on the material introduced in Quantitative Methods for Finance, this module covers a number of more advanced techniques that are relevant for financial applications, and in particular for modelling and forecasting financial time series. These include an introduction to maximum likelihood estimation and two-stage least squares, models of volatility, simulation techniques, and multivariate models. Case studies from the academic finance literature are employed to demonstrate potential uses of each approach. Extensive use is also made of financial econometrics software to demonstrate how the techniques are applied in practice.

Understanding customers, whether in consumer or business-to-business is at the heart of the marketing discipline. This module uses contributing social sciences such as psychology, sociology and economics to understand the drivers to consumer behaviour.

Students take one optional module;

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.

This module gives students the opportunity to pursue a work placement with an external organisation broadly related to the general sphere of their degree studies. The aim of the module is to allow participants to gain work experience in a career path of interest, develop a wide range of employability skills, build their network and enhance market awareness. The maximum duration of the placement is 3 months and it takes place during the summer period (June-August). Placements should be secured by students independently. The Centre’s career development office can support students in their search and application process. Placements secured by students are subject to the approval of the module convenor. The module is assessed by a 3,000-word project based on the work experience gained.

Industry participants estimate that 70-80% of equity trades are executed through computers. Market-makers in equity, fixed income and currency markets use algorithms to automatically adjust their quotes.

This module aims to provide students with an understanding of financial decision making in the context of alternative investments and to introduce the key principles and techniques of financial engineering used in structured product design.

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.

Sustainability is becoming a priority not only in government policy but also in business strategy. The role of the private sector in achieving sustainable production and consumption models is key to preserve fast depleting natural resources, improve social justice and reduce inequalities, address climate change and loss of biodiversity. This module explores how sustainability can be incorporated in business practices and balanced with corporate growth objectives.