Module code AC5003

Module specification Module title Module level Home academic faculty Total study hours Module approved to run in 2012/13 Principles of Finance BA London Metropolitan Business School

125

37.5 hours

!7.5 hours
Assessment components

Scheduled learning & teaching activities "uided inde#endent stud$ Weighting 20 20 -0 Campus /'+

90 hours 3 contact hours each week 2-hour lecture and 1-hour seminar 30 70 Description %n-class test on as#ects o( )uantitative anal$sis *ssa$ re)uiring inde#endent review o( research literature 3-hour unseen e,am Time Module Leader

Type %n-&ourse 'est &oursework +nseen *,amination

Qualifying mark 35 35 35 Day

Running in 2012 13

Period .ear

Module summary
This odule is desi!ned to introduce students to the "asic theor# of finance and to appl# the theor# to the selection and ana!e ent of financial invest ents$ As a prere%uisite& students 'ill "e introduced to %uantitative techni%ues that are essential for stud#in! finance$

Module aims
This core odule ai s to ena"le students to( 1) reinforce and e*tend the +no'led!e and !eneral understandin! of the role and application of %uantitative accountin! and finance conte*ts, 2) understand the "asic theor# of finance, 3) develop the s+ills of valuin! invest ent instru ents, -) criticall# evaluate the conceptual fra e'or+s for pricin! securities, 5) underta+e a 'ritten critical revie' of conte porar# theories in finance$ The odule also ai s to help students in the develop ent of the follo'in! s+ills( $ acade ic 'ritin!, $ researchin! $ anal#sis of econo ic financial data, ethods in

$ $

%uantitative pro"le .solvin! and decision. a+in!, self assess ent and reflection$

!ylla"us
#rinciples of $inance The role& or!anisation and operation of financial ar+ets, the econo ic function of financial ar+ets, financial innovation Fi*ed inco e securities( treasur# and corporate "onds, "ond pricin!, duration, ter structure of interest rate The e%uit# ar+et( pri ar# and secondar# issues, "asic share pricin! odels /tilit# theor# and ris+ aversion Portfolio theor#( ris+ and return, Mar+o'it01 portfolio theor# Asset pricin! odels( the capital asset pricin! odel 23APM) and the ar"itra!e pricin! theor# 2APT) The efficient ar+ets h#pothesis 24M5) Forei!n e*chan!e( spots and for'ards ar+ets Parit# conditions in forei!n e*chan!e ar+ets

%earning and teaching

The lecture 'ill "e used to introduce "asic finance concepts and techni%ues$ The se inar pro!ra e 'ill concentrate on pro"le solvin! e*ercises and interpretive s+ills$ 6uestions 'ill "e pre. distri"uted to allo' students to atte pt ans'ers in advance of the se inar$

%earning outcomes
7n successful co pletion of this odule& students 'ill "e a"le to( 1) appl# a variet# of techni%ues in %uantitative anal#sis to areas of accountin! and finance, 2) understand the assu ptions and li itations of the techni%ues that are e plo#ed, 3) e*plain the institutional arran!e ents relatin! to the issuance and tradin! of various capital ar+et securities, -) evaluate and appl# the various theoretical odels for deter inin! the fair value of different t#pes of securities, 5) advise on ho' to construct and ana!e portfolios for institutional and individual investors,

Assessment strategy
For al Assess ent 'ill co prise of in.class test 2208)& individual course'or+ 2208) and 'ritten e*a ination 2908)$ The in.class test 'ill re%uire a de onstration of +no'led!e and the application of %uantitative ethods learned$ The individual course'or+ 'ill re%uire an independent revie' of research literature in the for of an essa#$ The 'ritten e*a ination 'ill "e a 3.hour closed "oo+ assess ent$ The e*a ination %uestions 'ill have a focus on a specific section of the s#lla"us "ut a# cover ore than one topic$ The finance e*a paper& "# its ver# nature& consists predo inantl# of nu erical %uestions 'hich often re%uire len!th# calculations$ The duration of three hours for the e*a ination is& therefore& :ustified in atte ptin! to ini ise students1 an*iet# a"out ti e constraint and& there"#& enhance their chances of successfull# co pletin! the assess ent$

&i"liography
'uantitative Methods Recommended Reading( 7a+shott L& 4ssential 6uantitative Methods for Business& Mana!e ent and Finance & 5th edition& 2012& pu"lished "# Pal!rave Mac illan S'ift L and Piff S& 6uantitative Methods for Business& Mana!e ent and Finance & 3rd edition& 2010& pu"lished "# Pal!rave Mac illan #rinciples of $inance )ssential Reading( 7ne of the follo'in!( Pil"ea ;& Finance and Financial Mar+ets& 3rd edition& 2010& pu"lished "# Pal!rave Mac illan Lev# 5& Funda entals of <nvest ents& 2nd edition& 2002& pu"lished "# Pearson 4ducation

Recommended Reading( =utterford >& <ntroduction to Stoc+ 4*chan!e <nvest ent& 3rd edition& 200?& pu"lished "# Pal!rave.Mac illan Sharpe @& Ale*ander A and Baile# >& <nvest ents & 9th edition& 1BBB& pu"lished "# Prentice 5all 5au!en =& Modern <nvest ent Theor#& 5th edition& 2001)& pu"lished "# Prentice 5all 4lton& 4 >& Aru"er M& Bro'n S > and Aoet0 ann @ C& Modern Portfolio Theor# and <nvest ent Anal#sis& Dth edition& 200D& pu"lished "# >ohn @ile# Baile# =& The 4cono ics of Financial Mar+ets& 1st edition& 2005& pu"lished "# 3a "rid!e /niversit# Press