Empirical Finance | ECON3016 | University of Southampton

Module overview

Specifically the module aims to provide a bridge to the more theoretical articles in finance theory, by offering a simple framework of conceptual knowledge that enables thinking while making financial decisions. As such the module gives an appreciation of the scope of the whole disciplines' subject matter and lays the foundations for more specialized courses that have a narrower focus.

Linked modules

Prerequisites: ECON2006 OR ECON2026

Aims and Objectives

Learning Outcomes

Having successfully completed this module you will be able to:

Simulate popular investment strategies and assess whether you can make money out of them
Stock prices and returns behave and whether they are forecastable
Construct simple models to assess whether a stock price is over or undervalued
Demonstrate knowledge and understanding of the tradeoffs between stock market risk and return and explore various ways of quantifying risk
Conduct event studies for assessing the impact of events on stock prices

Syllabus

: This course confronts economic theories (e.g. efficient markets, CAPM) about stock prices and returns with real world financial data. The first part of the course deals with how prices and returns should behave in an efficient market and introduces statistical techniques to assess whether such behavior is supported by the data. The second part of the course looks at departures from the efficient markets framework by introducing various popular investment strategies used by fund management companies as well as techniques used to assess whether it is possible to beat the market by following such strategies. At the end of the course students should also become well versed in the overall characteristics of equity markets and modern fund management practices.

Learning and Teaching

Teaching and learning methods

Lectures and Masterclass

Study time
Type	Hours
Independent Study	122
Teaching	28
Total study time	150

Assessment

Assessment strategy

Assessment in this module is through coursework in form of problem sets (each worth 5% of the final mark), continuous successful participation in class activities such as online tests, quizzes, etc. (5%), and a comprehensive problem set at the end of the semester (85%).

Summative

This is how we’ll formally assess what you have learned in this module.

Breakdown
Method	Percentage contribution
Assignment	85%
Participation	5%
Coursework	5%
Coursework	5%

Referral

This is how we’ll assess you if you don’t meet the criteria to pass this module.

Breakdown
Method	Percentage contribution
Assignment	100%

Repeat

An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.

Breakdown
Method	Percentage contribution
Assignment	100%

Repeat Information

Repeat type: Internal & External