Introductory description

This module provides a foundational introduction to financial markets, instruments, and investment decision-making. It is designed for students with limited prior exposure to finance and covers key areas such as the structure and role of financial markets, basic valuation of securities, and the trade-off between risk and return. The module emphasises intuitive understanding and real-world applications, introducing students to equities and fixed-income instruments, portfolio diversification, and the role of financial institutions. More advanced technical topics are excluded to ensure accessibility, while providing a strong platform for subsequent finance modules within the programme.

Module aims

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 to financial systems and markets – Overview of financial markets, key participants, and their economic roles
Financial assets and instruments (equities and bonds) – Basic features and functions of major financial securities
Time value of money – Core principles of discounting and compounding for valuing cash flows
Interest rates and bond pricing – Relationship between interest rates, bond prices, and yields
Equity valuation fundamentals – Intuitive approaches to valuing shares based on expected cash flows
Risk and return – Measurement and trade-off between investment risk and expected return
Portfolio diversification – How combining assets reduces risk and improves investment outcomes
Asset pricing and CAPM – Linking risk to expected return using the Capital Asset Pricing Model
Portfolio choice and investment strategies – Applying risk–return concepts to asset allocation and investment decisions
Market efficiency and behavioural aspects – Understanding how information and investor behaviour affect market prices

Learning outcomes

By the end of the module, students should be able to:

• Demonstrate a working understanding of financial markets, instruments, and institutions, and explain core concepts such as time value of money, valuation, risk and return, and basic asset pricing (CAPM).
• Interpret financial information, analyse investment choices in a structured way, and relate theoretical concepts to real-world financial market behaviour.

Indicative reading list

Reading lists can be found in Talis

Subject specific skills

Apply basic financial tools to value simple securities, analyse risk and return, and make informed investment decisions using diversification and asset pricing concepts.

Transferable skills

Use basic numerical and analytical techniques, interpret financial data, and communicate financial reasoning clearly in written form.