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DRPS : Course Catalogue : Business School : Common Courses (Management School)

Postgraduate Course: Financial Markets and Investment (CMSE11407)

Course Outline
SchoolBusiness School CollegeCollege of Arts, Humanities and Social Sciences
Credit level (Normal year taken)SCQF Level 11 (Postgraduate) AvailabilityNot available to visiting students
SCQF Credits10 ECTS Credits5
SummaryThe course provides an introduction to the structure and functioning of equity, bond markets and derivative markets. It also focuses on specific topics that include: modern portfolio theory, asset pricing factor models, behavioural finance, fixed income valuation, the term structure of interest rates and risk management using derivative securities.
Course description Students are expected to get acquainted with the structure of equity, bond and derivative markets and the main instruments traded in these markets. This will be achieved by a mix of lectures on the related theory and discussion of published research in the area.

Outline Content

Portfolio Management: Mutual Funds & Hedge Funds
Fixed Income Markets
Portfolio Optimisation
Asset Pricing Factor Models
The Efficient Markets Hypothesis
Behavioural Finance
Introduction to Derivatives
The Financial Crisis

Student Learning Experience

The lecture programme is designed to introduce students to key financial markets and methods used to make portfolio investment decisions in these markets. The key information and concepts are presented in both lectures and tutorials, and both use simple numerical examples to promote understanding. The empirical literature related to the various topics will be employed to enhance the practicality of the subject matter. There will be time for questions and discussion in class.

Entry Requirements (not applicable to Visiting Students)
Pre-requisites Co-requisites
Prohibited Combinations Other requirements None
Course Delivery Information
Academic year 2020/21, Not available to visiting students (SS1) Quota:  None
Course Start Semester 1
Timetable Timetable
Learning and Teaching activities (Further Info) Total Hours: 100 ( Lecture Hours 20, Seminar/Tutorial Hours 10, Programme Level Learning and Teaching Hours 2, Directed Learning and Independent Learning Hours 68 )
Assessment (Further Info) Written Exam 40 %, Coursework 60 %, Practical Exam 0 %
Additional Information (Assessment) Written Examination (Individual) 40%
Group report 60%
Feedback Students will be encouraged to ask questions in class and meetings as requested with the course lecturer.

There will be feedback on the blog posts, and general feedback on the exam performance.
Exam Information
Exam Diet Paper Name Hours & Minutes
Main Exam Diet S1 (December)Financial Markets and Investment (CMSE11407)2:00
Learning Outcomes
On completion of this course, the student will be able to:
  1. Understand and critically discuss the role of the financial system in an economy.
  2. Understand and critically discuss how markets for equities, bonds and derivatives function and how these instruments are traded.
  3. Understand and critically discuss the role of capital markets in raising finance for firms and the role of derivative markets in risk management.
  4. Critically evaluate issues related to portfolio construction, valuation and risk management.
  5. Analyse and critically evaluate the empirical literature relating to topics covered on the course.
Reading List
Investments by Bodie, Z., Kane, E., and Marcus, A.J., Eleventh Edition
ISBN: 978-1-260-08339-2

Research Papers and Articles

The course also relies heavily on research papers and articles both by academics and practitioners on financial markets and portfolio management. Some of these articles provide a review of the topic while others are more specialised. You will have to read these in your own time. The suggested articles will often contain econometric and statistical analysis, it is not intended that you should be conversant with this material and much of this will be outside of the purview of this course. Your reading of these articles should therefore be focused on the descriptive aspects such as the details of the institutional and regulatory features, the main hypotheses tested and the managerial and policy conclusions reached. These articles for the course can be accessed as electronic (pdf) copies via the electronic collection maintained by the Library and available to students via the MyBiz portal while others have to be obtained by individual search using web and other resources. These papers are an essential part of the module and the assessed work is based on reading and understanding in a critical way the content of the suggested references.
Additional Information
Graduate Attributes and Skills Cognitive Skills:
The course will develop:
- skills of reasoning and numerical analysis
- decision-making skills in an investment context
- familiarity with financial concepts and techniques
- intuition to aid financial decision making

Subject Specific Skills:
After completing this course, students should be able to:
- Acquire knowledge of the basic concepts of the structure and function of financial markets.
- Break down the characteristics of investments in equity, fixed income and derivative securities
- Present in an organised manner academic and clinical research studies related to operation of financial markets and the investment decisions faced by market participants.
- Find and analyse relevant literature on issues related the role of capital markets in providing capital for firms and contributing to economic growth.
Special Arrangements For Business School / MSc Finance, Technology and Policy students only, or by special permission of the School. Please contact the course secretary
KeywordsNot entered
Course organiserDr Ronan Gallagher
Tel: (0131 6)50 8075
Course secretaryMs Rhiannon Pilkington
Tel: (0131 6)50 8072
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