Finance and Investment MSc

The module examines the equity asset class as an example of a long term, generally risky, financial security. Since semester two specialist modules in fixed interest securities and derivatives are available, this module provides only a basic introduction to these other classes of financial instruments.

The module looks at the way performance of an investment in equities is characterised, and how such investments have performed in the past. The processes of equity portfolio construction, management and performance measurement are then examined. The perspective adopted is that of the purchaser, not the issuer, of equity.

The module covers the traditional content of a corporate finance course:

• Investment, capital structure, and dividend decisions from a shareholder value perspective
• Capital market behaviour (background)
• Mergers
• Real options

The module provides you with a good understanding of econometrics tools covering topics such as statistical distribution theory, multiple regression analysis for cross-sectional data, time series analysis, panel data and qualitative response models with finance related applications.

The module covers :

• introduction to derivatives
• forward and futures contracts, how they are traded and used for hedging
• static hedging
• stock indices and stock index futures
• derivatives - European and American styles
• derivative valuation - Binomial trees, Black-Scholes
• financial engineering
• the Greeks and dynamic hedging

The module covers:

• institutional framework of international and UK bond markets
• bond yield and pricing models
• spot and forward interest rate determination
• measuring interest rate risk of bonds
• pricing of Interest rate derivatives
• role of credit rating agencies and the determination of credit ratings
• measuring credit risk
• bond market strategies

The module aims to allow you to synthesise, apply, and extend the knowledge you have gained in the taught component of the programme by engaging in primary data collection. Through investigating a current research topic and gathering original data, you will develop a deeper theoretical and practical understanding of contemporary issues in your area, while also enhancing your research, communication, and data analysis skills.

The Business Project requires students, working as groups, to undertake research in a topic which is relevant to business, management, marketing, finance, accounting, or information system. You must choose their research topic that is relevant to your named degree programme. The specific topic is subject to a formal approval process.

The module is intended for you to apply knowledge, concepts, skills, and techniques, acquired during the taught stage of your programme to real-world, business scenarios. You will be presented with real-word business problems for which you are required to review relevant literature, conduct research, analyse data, and formulate viable solutions.

The module will provide an introduction to the field of behavioural finance. In recent decades, the standard finance theory which is based on the Efficient Market Hypothesis and the rational choice model has been heavily criticised. Behavioural finance challenges these traditional theories and presents an alternative.

The behavioural finance approach is based on the ideas and findings from psychology and neuroeconomics and is applicable to a wide range of contexts such as investing, retirement saving behaviour and corporate finance

The module provides you with a knowledge and understanding of key practical applications of finance using standard computer software. Students taking the module are assumed to have prior background knowledge of financial markets and financial econometrics.

It equips you with computational and programming skills, allowing you to analyse financial data, build financial models and solve complex financial problems. The module will also integrate application areas in finance which have already been introduced, or which are being introduced concurrently. Topics include:

• Basic R commands
• analysing and visualising financial data
• modelling and forecasting financial time-series
• applications relevant to asset pricing and portfolio analysis

The module starts with early phase of a typical firm’s life cycle with discussion of the role of venture capital in mentoring and leading them to possible exits including Initial public offerings. These will be followed by an in-depth analysis of financial markets with diversity of financial claims issued by both young and matured companies.

The module will then also explore corporate restructuring and financial decisions leading to analysis of corporate breakup transactions (divestitures, spinoffs, equity carve outs, tracking stocks), leveraged recapitalizations, and leveraged buyouts (LBOs) and study the value-drivers behind them with both theoretical framework and empirical analysis linking current events. It will also discuss factors that determine cross-border takeover, and the influence of cross-border M&As on corporate shareholders' wealth and corporate governance.

Finally topics dealing with corporate social responsibility and its value-enhancing capabilities and the link between corporate political connections (managers, board members, shareholders) and corporate financing activities will be discussed in detail from both theoretical and empirical perspectives.

The module uses a game-theoretic approach to analyse strategic firm-behaviour. It intends to cover topics from industrial economics such as competition, market entry, product differentiation, leader-follower, and merger and acquisition.

This module examines:

• exchange rates and FX markets
• FX market efficiency
• real exchange rate and purchasing power parity
• exchange rate determination
• exchange rate forecasting
• FX predictability: Statistical significance and economic value
• FX volatility strategies
• global equity analysis
• global performance evaluation

This module covers:

• Fundamentals of sustainable finance 
• Sustainable corporate finance
• Sustainable financial investors and investments
• Sustainable financial intermediaries
• Green banks

Venture capital and private equity provide risk capital to firms at various stages of their life-cycle. This involves selecting early-stage and late-stage investment opportunities, due diligence, structuring deals, valuation, managing portfolio firms, and exit.

The module provides an introduction to modern econometric techniques for modelling financial data. It covers relatively advanced econometric techniques such as dynamic panel data modelling, generalised methods of moments, discrete choices models and modelling volatility via ARCH/GARCH models.