IB9U0-15 Financial Management
Introductory description
This module is designed to provide students with the background of financial aspects of managerial decisions. We will cover several areas of finance, including the valuation of real and financial assets, risk management and financial derivatives, the trade-off between risk and expected return.
Module aims
The module aims to provide students with an in-depth understanding of and key skills in:
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The course investigates how to manage the trade-off between maximising expected return and minimising risk for portfolios of securities. -
Issues to be considered include valuation of bonds and equities, selection of securities and optimal portfolio strategies through time -
The module will introduce and develop basic asset pricing models (like CAPM) and their tests While the theoretical underpinnings will not be neglected, the emphasis of the course will be on implementation of the theory i.e. financial management in practice
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
Introduction: Markets, "Players", Asset Classes.
Portfolio Management: Portfolio Construction (Mean-Variance Optimization ).
Asset Pricing Models: CAPM.
Asset Pricing Models: Arbitrage Pricing Theory.
Market Efficiency.
Bonds: Interest Rate / Credit Risk, Strategies.
Derivatives: futures and options markets.
Derivatives: basic valuation and hedging strategies.
Portfolio Performance Measurement.
Learning outcomes
By the end of the module, students should be able to:
- Students who successfully complete this course will have a deep understanding of the theory and practice of asset pricing, optimally combining securities into portfolios, institutional understanding of security markets, and some of the issues that a fund manager faces in putting theory into practice. They will be familiar with the theoretical and applied literature on modern portfolio management and investment analysis.
- Upon completing this module students will be able to: evaluate the relevance and practical application of established paradigms and theories.
- Upon completing this module students will be able to: recognise the vital importance of portfolio construction and diversification of risk.
- Upon completing this module students will be able to: critically appraise the concept of market efficiency and its implication for investment professionals.
- Upon completing this module students will be able to: analyse real world events, case studies and/or data, in the context of a given theoretical framework.
Indicative reading list
Generic Reading lists can be found in Talis
Subject specific skills
On successful completion of the module students will be able to:
Intelligently discuss issues pertaining to financial management.
Demonstrate how better investment decisions can be made.
Specify simple portfolio optimization problems considering the trade-offs between different measures of return and risk, as well as various constraints (e.g. pertaining to short-selling, transaction costs, diversification etc).
Perform basic data manipulations and analyses relevant to portfolio investing in statistical software.
Transferable skills
- Use a variety of sources to acquire data to investigate a given research hypothesis.
- Use spreadsheet or other suitable software to visualise and analyse data.
- Use spreadsheet or other suitable software to perform complex calculations.
- Demonstrate problemsolving skills.
- Demonstrate written and verbal communication skills. Develop team-working skills
Study time
| Type | Required |
|---|---|
| Lectures | 10 sessions of 1 hour (7%) |
| Seminars | 9 sessions of 1 hour (6%) |
| Other activity | 10 hours (7%) |
| Private study | 49 hours (33%) |
| Assessment | 72 hours (48%) |
| Total | 150 hours |
Private study description
Self study to include pre-reading for lectures and seminars
Other activity description
1 hr per week will be either a face to face lecture or asynchronous tasks with either online or face-to-face support
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group D2
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
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| Class test | 20% | 14 hours | No |
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45 mins |
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Reassessment component is the same |
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Assessment component |
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| In-person Examination | 80% | 58 hours | No |
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Reassessment component is the same |
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Feedback on assessment
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Courses
This module is Core for:
- Year 1 of TIBS-N1F5 Postgraduate Taught Business and Finance