The University of Southampton
Courses

MANG6142 Introduction to Portfolio Management and Exchange Traded Derivatives

Module Overview

The aim of this module is to provide a broad introduction to portfolio selection and derivatives from a theoretical and practical viewpoint. The course will show the interaction between asset management and derivatives.

Aims and Objectives

Module Aims

This module aims to provide you with a general introduction to modern portfolio theory and its relationship to investment management, and the nature and use of exchange rate and equity derivatives in hedging portfolio and security risk.

Learning Outcomes

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

  • the construction of portfolios or risky assets, the relationship between risk and return, and the nature and sources of risk in a stock market context;
  • the nature and use of derivative instruments for hedging portfolio and other risks.
Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

  • analyse an equity portfolio in terms of risk and return;
  • evaluate the hedging requirements of a variety of investment management situations;
  • explain the role of exchange-funded derivative instruments in hedging financial risk;
  • use the CAPM, APT and other multi-factor models to analyse the risk and return properties of equity portfolios, together with their role in generating market anomalies and their relation to investment management strategies;
  • use stock market and interest rate futures and options’ derivatives for hedging and speculation, along with understanding the role of the Black-Scholes and binomial models in options’ valuations.
Transferable and Generic Skills

Having successfully completed this module you will be able to:

  • critically analyse returns data for financial securities and make informed decisions about investment management;
  • develop presentation skills in the context of group presentations;
  • acquire team skills in the preparation of group material;
  • team work.

Syllabus

- Introduction to Finance and Portfolio Management, including risk and return in stock markets, security and portfolio analysis - Consumption and Investment - Capital Market Theory, including the CAPM, APT and other multi-factor models of risk and return - The nature and use of forwards, futures and options’ contracts, particularly in the context of stock market and exchange rate instruments - Arbitrage and hedging in theory and practice for futures - Options’ valuation approaches, especially the Black-Scholes and Binomial models, and their use in hedging strategies

Learning and Teaching

Teaching and learning methods

The module is taught over a period of six weeks. Each week consists of 3.5 hours plus of teaching. The teaching consists of 3 lectures per week plus one class involving case studies and numerical problem solving.

TypeHours
Teaching24
Independent Study126
Total study time150

Resources & Reading list

Elton, E.J., Gruber, M.J., Brown, S.J. and Goetzmann, W.N. Modern Portfolio Theory and Investment Analysis. 

Copeland, T. E., Weston, J. F. and Shastri, K. Financial Theory and Corporate Policy. 

Hull, J. C.. Options, Futures and Other Derivatives. 

Kolb, R. Futures, Options and Swaps. 

Assessment

Formative

Tutorial

Summative

MethodPercentage contribution
Examination  (2 hours) 70%
Group Assignment  (3000 words) 30%

Repeat

MethodPercentage contribution
Examination  (2 hours) 100%

Referral

MethodPercentage contribution
Examination  (2 hours) 100%

Repeat Information

Repeat type: Internal & External

Costs

Costs associated with this module

Students are responsible for meeting the cost of essential textbooks, and of producing such essays, assignments, laboratory reports and dissertations as are required to fulfil the academic requirements for each programme of study.

In addition to this, students registered for this module typically also have to pay for:

Textbooks

Recommended texts for this module may be available in limited supply in the University Library and students may wish to purchase the core/recommended text as appropriate.

Please also ensure you read the section on additional costs in the University’s Fees, Charges and Expenses Regulations in the University Calendar available at www.calendar.soton.ac.uk.

Share this module Facebook Google+ Twitter Weibo

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.

×