Undergraduate Course: Introduction to Financial Markets (BUST08029)
Course Outline
| School | Business School |
College | College of Arts, Humanities and Social Sciences |
| 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. The course is a practical course 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. |
| Course description |
You have only to think back to the recent financial crisis to realize the impact financial markets have in todays world. But that is not the only reason it is important to understand how financial markets work. All decision making implicitly requires an assessment of risk, possible returns and the trade-off between them. In financial decision making these assessments comes to forefront and they are most explicit in pricing of assets traded in financial markets. 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.
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 is 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 2024/25, 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 8,
Summative Assessment Hours 2,
Programme Level Learning and Teaching Hours 4,
Directed Learning and Independent Learning Hours
156 )
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| Assessment (Further Info) |
Written Exam
70 %,
Coursework
30 %,
Practical Exam
0 %
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| Additional Information (Assessment) |
70% Written exam (Individual) - Assesses course Learning Outcomes 1,2,3,4
30% coursework (Individual) - comprising of 24% Essay and 6% Financal modelling assessment - Assesses all course Learning Outcomes |
| Feedback |
Formative: Feedback will be provided throughout the course.
Summative: Feedback will be provided on assessments within agreed deadlines. |
| Exam Information |
| Exam Diet |
Paper Name |
Hours & Minutes |
|
| Main Exam Diet S2 (April/May) | Introduction to Financial Markets BUST08029 | 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 characteristics and pricing of financial futures and options.
- Understand and explain the effects on financial markets of exchange rates, interest rates and the pricing of bonds.
- Develop your computing skills with the use of Financial Modelling in Excel.
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Reading List
Essentials of Investments: Global Edition, Bodie, Kane and Marcus, 12th Edition
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Additional Information
| Graduate Attributes and Skills |
Autonomy, Accountability and Working with Others
After completing this course, students should be able to:
Act with integrity, honesty and trust in all business stakeholder relationships, and apply ethical reasoning to effective decision making, problem solving and change management.
Communication, ICT, and Numeracy Skills
After completing this course, students should be able to:
Critically evaluate and present digital and other sources, research methods, data and information; discern their limitations, accuracy, validity, reliability and suitability; and apply responsibly in a wide variety of organisational contexts.
Knowledge and Understanding
After completing this course, students should be able to:
Demonstrate a thorough knowledge and understanding of contemporary organisational disciplines; comprehend the role of business within the contemporary world; and critically evaluate and synthesise primary
and secondary research and sources of evidence in order to make, and present, well informed and transparent organisation-related decisions, which have a positive global impact.
Identify, define and analyse theoretical and applied business and management problems, and develop approaches, informed by an understanding of appropriate quantitative and/or qualitative techniques, to explore and solve them responsibly.
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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 | Mr Scott Fitzsimmons
Tel:
Email: sfitzsim@ed.ac.uk |
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