Postgraduate Course: Foundations of Finance Theory (CMSE11053)
Course Outline
| School |
Business School |
College |
College of Humanities and Social Science |
| Course type |
Standard |
Availability |
Available to all students |
| Credit level (Normal year taken) |
SCQF Level 11 (Postgraduate) |
Credits |
20 |
| Home subject area |
Common Courses (Management School) |
Other subject area |
None |
| Course website |
None |
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| Course description |
The focus of this course is on the financial theory and empirical evidence that are useful for investment decisions. The topics covered in this course can be broadly categorized into three groups:
Financial Theories
This includes portfolio theory, the capital asset pricing model and the arbitrage pricing theory, all of which have become an integrated part of the decision-making in investments.
Empirical Evidence in the Equity and Equity Options Markets
This includes patterns in cross-sections of stock returns, the time-series behavior of stock returns time-varying expected returns, and further empirical evidence from the equity options market.
Introduction to Fixed-Income and Derivative Instruments
This includes bonds, derivatives, fixed-income derivatives such as swaps.
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Entry Requirements
| Pre-requisites |
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Co-requisites |
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| Prohibited Combinations |
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Other requirements |
None
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| Additional Costs |
None |
Course Delivery Information
Summary of Intended Learning Outcomes
On completing the module, students should:
Understand the concepts of risk and return
Be able to construct portfolios that are efficient in the sense that they maximise expected return for a given level of risk, or minimise risk for a given expected return.
Have a detailed knowledge of asset pricing models.
Understand the principles of market efficiency; be aware of the empirical evidence on market efficiency.
Be able to critically understand option-pricing models and be able to make extensions to the basic models.
This module will develop in students the ability to:
Rigorously analyse quantitative problems in finance.
Interpret financial data in the light of established theories.
Familiarise themselves with the most recent empirical research and be able to critically appraise it.
This module will develop in students the ability to
Analyse and evaluate quantitative problems;
Implement solutions to these problems using a spreadsheet;
Work independently and as part of a group.
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Assessment Information
| There is one group assignment which counts for 30% of the total mark and a final two hour exam which counts for 70% of the total mark. |
| Please see Visiting Student Prospectus website for Visiting Student Assessment information |
Special Arrangements
| Not entered |
Contacts
| Course organiser |
Dr Maria Michou
Tel: (0131 6)50 8341
Email: Maria.Michou@ed.ac.uk |
Course secretary |
Ms Claire Local
Tel: (0131 6)50 3574
Email: Claire.Local@ed.ac.uk |
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copyright 2010 The University of Edinburgh -
1 September 2010 5:45 am
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