Undergraduate Course: Introduction to Financial Markets (BUST08029)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 8 (Year 1 Undergraduate) |
Availability | Not available to visiting students |
| SCQF Credits | 20 |
ECTS Credits | 10 |
| Summary | The course is only open to students in the following degree programmes:
Accounting & Finance
Business & Finance
Economics with Finance.
The course aims to develop a student's understanding of the basic principles of finance. It builds on the introduction to finance provided in the Foundations of Business course. The course has a quantitative slant, and is designed to give a theoretical introduction to financial markets.
The course looks at the way assets are valued in financial markets. It considers interest rates and the pricing of fixed-income bonds; stock market prices and returns; stock market risk and the influence of risk on the pricing of shares; and the characteristics and pricing of financial futures and options.
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| Course description |
This course aims to develop students understanding of the basic principles of financial markets and provides an introduction how assets are valued and traded in those markets. The course considers stock market prices and returns; stock market risk and the influence of risk on the pricing of shares. It also considers exchange rates, interest rates and the pricing of bonds; and the characteristics and pricing of financial futures and options. But the most important contribution of this course to your future career is how to use the latest academic insights to better assess risks and returns, and the trade off between the two in your future decision making.
Scientific insights develop and change over time. Traditional views on financial markets are changing rapidly and many of the standard paradigms and theory are nowadays questioned. On the one hand because of recent developments like the recent financial crisis, on the other hand because new theoretical and empirical developments in the academic literature. This course aims to consider issues from different perspectives. It will address both the standard theory but also offer some of the new and alternative views. It is not only important to be aware off those different views from an practical point of view but it is also important for students who want to follow an academic career.
Finance is a field that relies strongly on the interaction between academic and practitioners knowledge. Therefore will pay close attention to the relation between academic and practical developments and invite a number of practitioners for guest lectures.
Syllabus
Elements of Investments
Portfolio Theory
Debt Securities
Security Analysis
Derivative Markets
Active Investment Management
Student Learning Experience
Introduction to Financial Markets is an introductory finance course and has been structured in such a way as to assume no prior knowledge of finance. The student's success will be determined mostly by the time they invest in mastering the material.
Ideally the student:
- Prepare for the lecture by reading the relevant a chapter(s).
- Attend the lecture
- Study the relevant chapter(s) after the lecture to put the lecture in context
- Use the Bodie, Kane and Marcus website and other materials for self assessments
- Dedicate serious time to work on the study questions before the tutorial
- Participate in the tutorial
- Revisit all study material before the exams
Finance is to a large extent an acquired way of thinking and some acquire this way of thinking faster than others (good numerical skills, but also common sense and talent help). Active engagement with multiple choices questions and exercises will improve the student's likelihood of success.
What may further help improve the student's skills beyond the study material is to read about financial markets in the real world (like the Financial Times) and apply the knowledge and insights from this course, or invest in (simulated) portfolios. There are numerous websites where students can practice trading and investing. There are academic articles that may be accessible to students at the undergraduate level. The Financial Analyst Journal and the Journal of Portfolio Management are a good starting point.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | Students MUST NOT also be taking
Principles of Finance (BUST08003)
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Other requirements | The course is only open to students in the following degree programmes:
Accounting & Finance
Business & Finance
Economics with Finance. |
Course Delivery Information
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| Academic year 2016/17, Not available to visiting students (SS1)
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Quota: None |
| Course Start |
Semester 2 |
Timetable |
Timetable |
| Learning and Teaching activities (Further Info) |
Total Hours:
200
(
Lecture Hours 30,
Seminar/Tutorial Hours 9,
Summative Assessment Hours 3,
Programme Level Learning and Teaching Hours 4,
Directed Learning and Independent Learning Hours
154 )
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| Assessment (Further Info) |
Written Exam
60 %,
Coursework
40 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
The assessment for the course comprises of a final examination (60%) and course work (40%).
Coursework (40%)
The coursework consists of two components:
1) A one hour multiple-choice test midterm (20%);
2) Two written assignments (10% each x 2 =20%).
Final Examination (60%)
The examination consists of 2 Sections:
Section A: Multiple choice questions 40%
Section B: Essay question 20%
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| Feedback |
Informal assessment and feedback
During the course a range of informal methods of providing assessment feedback to students will be used. This type of work will not contribute to your mark for the course but is designed to help you assess your progress and allow you to take action as necessary.
Examples of these modes of assessment include:
self-assessment by working through examples and comparing answers with solutions
tutorial assignments, tutor feedback and comparing answers with solutions
online multiple choice end of chapter revision tests
practicing the sample and prior year exam questions and comparing with the solutions
Students are expected to be self-motivated to make the most effective use of these informal assessment tools.
Exam Feedback
Your examination marks will be posted on Learn (together with generic feedback and examination statistics) as soon as possible after the Boards of Examiners¿ meeting. You will have the opportunity to look at your examination scripts in the UG Office (Room 1.11, Business School, 29 Buccleuch Place). Note that you will not be able to remove any examination scripts from the UG Office as they may be required by the Board of Examiners
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| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
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| Main Exam Diet S2 (April/May) | | 2:00 | | | Resit Exam Diet (August) | | 2:00 | |
Learning Outcomes
On completion of this course, the student will be able to:
- Describe the main financial assets and how they may be valued
- Discuss critically the contribution of finance theory to financial practice
- Understand and explain stock market prices and returns; stock market risk and the influence of risk on the pricing of shares
- Understand and explain the effects on financial markets of exchange rates, interest rates and the pricing of bonds
- Understand and explain the characteristics and pricing of financial futures and options
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Reading List
The recommended textbook for the course is:
Essentials of Investments: Global Edition, Bodie, Kane and Marcus, 9th Edition
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Additional Information
| Graduate Attributes and Skills |
Cognitive Skills
On completion of the course, students should be able:
a) to demonstrate that they can work in a tutorial group to analyse a financial problem using concepts covered in the lectures
b) to demonstrate that they can solve simple problems in finance
Key Skills
On completion of the course, students should:
a) have been encouraged to develop their written skills through the degree examination
b) be able to demonstrate an ability to solve numerical problems through tutorials and the degree examination
c) be able to communicate effectively in a tutorial group.
Subject-Specific Skills
On completion of the course, students should:
a) be aware of the techniques and insights relevant to the valuation of financial assets
b) be aware of the uses and limitations of these techniques and insights.
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| Additional Class Delivery Information |
3 x 1h lectures per week + 1h tutorials in Weeks 2-5, 8-12
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| Keywords | Not entered |
Contacts
| Course organiser | Dr Maria Michou
Tel: (0131 6)50 8341
Email: Maria.Michou@ed.ac.uk |
Course secretary | Mrs Judi Robertson
Tel: (0131 6)50 3900
Email: judi.robertson@ed.ac.uk |
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