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 or ECON1020 OR ECON1022 or Econ2041 or Econ2043
Aims and Objectives
Learning Outcomes
Subject Specific Intellectual and Research Skills
Having successfully completed this module you will be able to:
- construct statistical models of asset prices to assess the impact of events on stock prices and whether a stock price is over or undervalued
- conduct event studies using stock price data
- simulate popular investment strategies and assess whether you can make money out of them
Knowledge and Understanding
Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:
- statistical tools for economic and financial data analysis, such as event studies
- the behaviour of stock prices and returns and whether they are forecastable
- the tradeoffs between stock market risk and return and various ways of quantifying risk
- simple models to assess whether a stock price is over or undervalued
Transferable and Generic Skills
Having successfully completed this module you will be able to:
- use quantitative reasoning and analyse and interpret data
Syllabus
This module confronts economic theories (e.g. efficient markets, CAPM) about stock prices and returns with real world financial data. The first part of the module 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 module 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 module 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
| Type | Hours |
|---|---|
| Independent Study | 122 |
| Teaching | 28 |
| Total study time | 150 |
Resources & Reading list
General Resources
Lecture Notes. Lecture notes, slides, handouts and relevant book chapters posted on the module's Blackboard pages.
Assessment
Assessment strategy
Assessment in this module is through coursework in form of two problem sets (each worth 5% of the final mark), online quizzes (5%) and a comprehensive end of module examination (85%). This is supported by continuous formative assessment in form of problem sets. This is the same for internal repeat. Assessment for external repeat and referral is through 100% end of module examination.
Summative
This is how we’ll formally assess what you have learned in this module.
| Method | Percentage contribution |
|---|---|
| Quizzes | 5% |
| Coursework | 5% |
| Coursework | 5% |
| Final Assessment | 85% |
Referral
This is how we’ll assess you if you don’t meet the criteria to pass this module.
| Method | Percentage contribution |
|---|---|
| Final Assessment | 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.
| Method | Percentage contribution |
|---|---|
| Final Assessment | 100% |
Repeat Information
Repeat type: Internal & External