MSc Finance (Quantitative Finance)

The module covers an extensive range of issues and, in the next eight weeks, you will study a wide spectrum of topics associated with the relationship between the IMF and macroeconomic stabilisation. Because the subject matter is vast, I have tried to focus on some of the key themes and provide some indications as to where this subject matter can be studied in greater detail if or when you have time to do so.

This module provides students with fundamental knowledge in principles of international corporate finance and asset pricing to understand and analyse the major issues affecting the financial policies of corporation in capital markets. This course is concerned with the decisions that firms make about financing their investment in a global economic environment. You will study the principles underlying such decision-making, their application and debates over them in relation to the modern literature to develop analytical skills in a challenging global environment, and other complex specialised contexts.

This course has been specially designed to increase the depth of your understanding of macroeconomics by focusing on the relationship between financial markets and macroeconomics. We place the subject in a real-world context, aiming to show how theoretical and empirical knowledge of macroeconomics and financial markets provides ways to analyse the salient problems faced by modern macroeconomic policy makers.

It is widely recognised by academic economists and policymakers that developed and efficient banking and capital markets are an important prerequisite for economic growth. However, it is also recognised that banking and financial crises can cause abrupt slowdowns or reversals of growth. The drive to understand these phenomena has generated a large body of research, leading to new theories and empirical studies of key features of banking and capital markets. This literature provides the underpinning for the subject material of this module.

The emergence of an open, liberal international financial order has been one of most notable developments in the global economy in the last 20 years. The growth of a more open international economy since the Second World War produced an international environment in which markets have bypassed national regulations, and financial flows have seriously questioned the Keynesian demand management policies. The study of trade and production cannot, therefore, satisfactorily explain the behaviour of the international economy; finance and the institutions through which it flows should also be examined. In a world where consumption, production and investment are globalised, international finance has become an integral part of any serious academic study of international economics.

The main objective of this module is to study the economists' perspective on international finance, which is a policy-oriented perspective. The examination of the institutions of international finance and the key policy problems that have arisen in recent decades are the main concern of this module. In other words, it is the perspective that an economist would use when advising governments on how to work within the modern international financial system and how to overcome its problems.

This module introduces the basic concepts of corporate governance and theory of the firm. It is specially designed for the undergraduate study of such areas as management, finance, financial law, corporate law, economics and related subjects. The course is designed to increase the depth of your understanding of corporate governance issues. As corporate governance is a multi-disciplinary subject – covering such topics as law, politics, management, finance, and economics - the course outlines the key theoretical and practical issues underpinning the study of corporate governance, and how they affect the governance of the modern corporation. International comparisons and differences in corporate governance are emphasised throughout the course.

The dissertation is a supervised piece of research on a topic that we will agree with you. The length will be 10,000 words. Before we can consider a proposal to submit a dissertation we will need to review your academic performance so far. Students wishing to take the Dissertation should ideally do so in their second or third year of study.

The module has been designed to introduce you to some of the key concepts, principles and practices in modern banking regulation and the resolution of modern banking crises. The literature on these subjects is vast so, in approaching the material, we will focus on a selection of key issues of relevance to the topic.

The module introduces a wider range of microeconomic theories and applications than only those reflecting traditional or ‘neoclassical’ views. Some of these are more contentious than others as they have implications for public policy. There are two narratives, or theoretical approaches, running through this module. The first is the traditional neoclassical approach, which is based on the assumption that all economic actors behave rationally to improve their own self-interest in markets that are competitive. The second narrative covers alternative approaches that have been developed to analyse economic behaviours.

Welcome to this module on Risk Management: Principles and Applications. This module has four main aims, to: illustrate the main types of risk; present the most important ideas and methods used in the analysis of portfolios of financial securities, including stocks and bonds; explain how rational investors can use financial derivatives (mainly, futures and options) in order to alter the risk of their investment position; and illustrate some more specialised risk management techniques, such as Value at Risk and Credit Risk. The emphasis throughout is on the general principles behind the investment decisions, rather than on case studies or anecdotal evidence. Thus, you will study: the main features of portfolios, which include stocks and bonds, how to calculate their risk, and how investors can combine their holdings of different securities to reduce their overall risk without sacrificing return. Similarly, when you deal with futures and options, you will explore how these instruments can be used to manage risk and to expand the opportunity set of investors.

This module provides an introduction to econometric methods. In brief, the module examines how we can start from relationships suggested by financial and economic theory, formulate those relationships in mathematical and statistical models, estimate those models using sample data, and make statements based on the parameters of the estimated models. The module examines the assumptions that are necessary for the estimators to have desirable properties, and the assumptions necessary for us to make statistical inference based on the estimated models. In addition, the module explores what happens when these assumptions are not satisfied, and what we can do in these circumstances. The module concludes with an examination of model selection.

The purpose of this module is to broaden your knowledge and extend your understanding of econometrics. In doing this, you will work with data. The first two units extend your knowledge of single equation methods. Unit 1 considers how to make progress with dummy – that is, qualitative – regressors. Unit 2 introduces dynamic models by showing how lags and expectations can be incorporated. The following three units focus on models that consist of two or more equations – simultaneous equation models. The nature of such systems is explained and their identification and estimation discussed. The analysis of dynamic models is extended in Unit 6, where the time series properties of variables are discussed. By understanding the time series properties of variables, you will be able to specify dynamic econometric models that capture both short-run and long-run effects. These are discussed in Unit 7. The final unit, Unit 8, focuses on forecasting with both econometric and time series models.

Multi-person decision problems under uncertainty have always played a crucial role in financial markets. For instance, if you buy a stock in a firm, your profit will depend on whether or not its market goes up. To understand decision-making processes and find their possible solutions in real-world problems (such as contracts, mechanisms, bank runs, etc.) you first need to learn how to think strategically. For this, you need to understand some basic and standard market problems among players.

This module will introduce the main econometric methods and techniques used in the analysis of issues related to finance. The first objective of this module is to introduce the main econometric methods and techniques used in the analysis of issues related to finance. A module with the title Financial Econometrics assumes that such a field exists.

In this module, we define financial econometrics as ‘the application of statistical techniques to problems in finance’. Although econometrics is often associated with analysing economics problems such as economic growth, consumption and investment, the applications in the areas of finance have grown rapidly in the last few decades.

The module provides an introduction to the analysis of derivatives in financial markets. You will learn the main features of the most commonly used financial derivatives, and you will understand how to use them for the management of risk. These units explain and discuss the theoretical models that are used to analyse derivatives, and you will also see how derivatives are used in practice. You will study spreadsheet models of derivatives, analysing the performance and valuation of derivatives contracts and trading strategies, starting with the simplest options, and extending to more complex strategies and derivatives contracts. These spreadsheet models will help you to develop a deeper and stronger understanding of derivatives and how they work.

This module focuses on the conceptual and analytical aspects of derivatives. After studying this module, you will be able to understand the main characteristics of derivatives, the potential for using derivatives to manage risk, and you should be able to avoid some of the more serious misunderstandings and mistakes associated with using derivatives.