International Investment and Trading

Rob Hayward and Lawrence Haar

February 8, 2021

1 Introduction
This module will give you an introduction to the working of financial mar-
kets. It also seeks to provide the opportunity for you to develop, apply and
test theories and tools that have been presented through the course. It aims
to integrate economics, finance and accounting skills in the development of
investment strategies. The module will be divided into two main sections:
financial market simulations; the application of financial techniques to de-
velop investment strategies.

2 Assignments
There are two written assignments of 1000 words that will prepare you for
the final presentation. The written assignments will develop you ability
to build diversified portfolios, to find market inefficiencies and to assess
investment performance.
The presentation of your own investment strategy will take place on 4
June 2021, it can be any time frame and any method of analysis. It is your
opportunity to develop and showcase a method of analysis that is of interest
to you.

3 Textbooks
There is no textbook that will cover all the topics that we will consider in
this module. However, there are a number of books (available in the library)
Rob Hayward and Lawrence Haar

which will may be useful for some parts of the module. You can also look
at the reading list on My Studies for additional readings.

The three main texts that will be useful for this course are:

Bodie, Z, A. Markus & A.J. Marcus, 2012, Investments and Portfolio

Management, McGraw-Hill, 9th edition

Ibbotson, R. & J. Francis, 2002, Investments: a global perspective, Pren-

tice Hall
There are two copies in the 7 day loan system in the Aldrich library.

Levy, H. & T. Post, (2005), Investments, Prentice Hall

There is one copy in the library and there is one e-book that is available to
read on line.

Other books that may be useful include

Ang, A. (2014), Asset Management: A Systematic Approach to Factor

Investing, OUP
There is a copy in the library.

Mishkin, F.S. & S. G. Eakins, (2008), Financial Markets and Institu-

tions, Pearson

Valdez, S. (2008), An Introduction to Global Financial Markets, Pal-

grave

Pilbeam, K., (2005), Finance and Financial Markets, Palgrave

Howells, P., & K. Bain, (2005), The Economics of Money, Banking and
Financial Markets, Prentice Hall.

4 Journal Articles
In addition to this, there are a number of journal articles that will be very
useful. I will add to the list of journal articles as we progress. In some parts
of these articles, there will be a lot of mathematics that will be difficult.
However, the basic ideas are usually presented in the first few pages. Get
used to reading the introduction of papers to get an overview of the main

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Rob Hayward and Lawrence Haar

ideas that are being presented. If it is interesting, you can also look at some
of the evidence that is presented in the tables and diagrams.

W. F. M. De Bondt & R. Thaler (1985). ‘Does the Stock Market Over-

react?’. The Journal of Finance 40(3):793-805.

E. F. Fama (1998). ‘Market efficiency, long-term returns, and behavioural

finance’. Journal of Financial Economics 49(3):283-306.

B. G. Malkiel (2003). ’The Efficient Market Hypothesis and its Critics,

The Journal of Economic Perspectives 17(1): 59-82

R. J. Shiller (2003). ’From Efficient Markets Theory to Behavioural

Finance, The Journal of Economic Perspectives (17)1: 83-104

You should be able to find these in the on-line library. There is a tab on
student central that will take you to the library. You should use the database
to search. A very good database to start with for older papers is JSTOR (you
will find Malkiel and Shiller there); you will find De Bondt and Thaler in the
Business Source Premier database; you will find Fama in Science Direct.
There are links to the articles in student central.

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Rob Hayward and Lawrence Haar

5 Module Timetable
Dates are for the Monday. Face-to-face sessions will be held in MG13 on
Friday of the scheduled week.

Date Topic Tutor

08 Feb 2021 Introduction to Bloomberg Lawrence
15 Feb 2021 Introduction: measuring returns Rob
22 Feb 2021 Risk Rob
01 Mar 2021 Factor investment Rob
08 Mar 2021 Hedge funds Rob
15 Mar 2021 ESG funds Rob
22 Mar 2021 Efficient markets and price discovery Lawrence
29 Mar 2021 to 19 Apr 2021: Easter holiday
19 Apr 2021 Long term debt and bond pricing Lawrence
26 Apr 2021 Equity valuation Lawrence
03 May 2021 Derivatives Lawrence
10 May 2021 Options and their pricing Lawrence
17 May 2021 Behavioural finance Rob
24 May 2021 Technical trading Rob
31 May 2021 Drop in to talk about presentation

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