Module Information
Module Identifier
ABM1220
Module Title
International Financial Markets and Investments
Academic Year
2020/2021
Co-ordinator
Semester
Semester 1
Other Staff
Course Delivery
Assessment
Due to Covid-19 students should refer to the module Blackboard pages for assessment details
| Assessment Type | Assessment length / details | Proportion |
|---|---|---|
| Semester Exam | 3 Hours | 70% |
| Semester Assessment | Written Essay (3,000 words) | 30% |
| Supplementary Exam | 3 Hours | 70% |
| Supplementary Assessment | Written Essay (3,000 words) | 30% |
Learning Outcomes
On successful completion of this module students should be able to:
1. Critically evaluate alternative paradigms/perspectives in finance and investment theory.
2. Identify and explain the motivations and behaviour of different financial market participants, and evaluate the risk and expected return characteristics of different investment instruments.
3. Apply appropriate theory and empirical techniques to problems in investment portfolio optimization, asset valuation and pricing, and market efficiency.
4. Explain the construction and valuation of financial derivative instruments, their risk characteristics, and their contribution to risk management.
5. Explain, analyse and evaluate the theory of market microstructure and its implications for market performance; analyse and evaluate the process of market making, inventory models, liquidity and the relationship between markets.
Brief description
This module provides with strong theoretical and empirical background in investments and financial markets. There is coverage of investment appraisal techniques, equity instruments, bonds and other fixed income instruments, derivatives instruments, and synthetic instruments, pricing and valuation of equity, asset pricing models, risk management using financial derivatives, and financial market microstructure.
Content
• Investment appraisal, time value of money
• Discounted cash flow, project appraisal criteria, inflation and risk
• Term structure of interest rates
• Interest rate theories: expectations hypothesis, liquidity preference, inflation uncertainty
• International financial markets, risk and return, international diversification and its limitations, active and passive investment strategies
• Portfolio theory, efficient markets hypothesis, Capital Asset Pricing Model, Arbitrage Pricing Theory
• Equity valuation, dividends, earnings, free cash flow
• Bonds and other fixed-income securities valuation
• Bond prices, yields, duration measures
• Derivatives: Forward and futures contracts, options and option pricing models, swaps and forward rate agreements, risk management
• Market microstructure theory
• Discounted cash flow, project appraisal criteria, inflation and risk
• Term structure of interest rates
• Interest rate theories: expectations hypothesis, liquidity preference, inflation uncertainty
• International financial markets, risk and return, international diversification and its limitations, active and passive investment strategies
• Portfolio theory, efficient markets hypothesis, Capital Asset Pricing Model, Arbitrage Pricing Theory
• Equity valuation, dividends, earnings, free cash flow
• Bonds and other fixed-income securities valuation
• Bond prices, yields, duration measures
• Derivatives: Forward and futures contracts, options and option pricing models, swaps and forward rate agreements, risk management
• Market microstructure theory
Module Skills
| Skills Type | Skills details |
|---|---|
| Application of Number | • Develop an easy familiarity with numerical data sources and numerical data • Apply numerical data to problem solving with care and accuracy • Assess the reasonableness of and interpret numerical solutions • Support assertions/arguments with appropriately developed and presented numerical data |
| Communication | • Develop confidence in and clarity of oral communication via seminar / tutorial participation • Develop clarity and focus of written communication via production of coursework essay • Develop and use appropriate subject-specific vocabulary in oral and written communication |
| Improving own Learning and Performance | • Identify and distil the key issues covered by lectures, seminars and directed self-study • Identify and use a range of learning resources • Investigate benefits of small group working on self-study • Structure study to accommodate intensive learning |
| Information Technology | • Use a variety of electronic web- and library-based resources to review available information and retrieve pertinent information • Use various software packages for the production of the coursework essay (text, numerical tables and analysis, graphics) • Use software to complete elements of the self-study (e.g., spreadsheets for ease of tabulated numerical calculations, production of summary statistics, production of graphs, etc.) |
| Personal Development and Career planning | • Develop knowledge and skills in finance and investments which are useful/essential in a number of different occupations • Identify a variety of potential career routes within the academic, financial and professional services sector |
| Problem solving | • Identify the precise problem to be solved • Assess which data are pertinent to the problem • Recognize that alternative solution methods might be available • Select and apply appropriate methods for solving the problem • Assess the reasonableness of problem solutions and interpret those solutions |
| Research skills | • Identify which information sources are available to: o facilitate module study (understanding, wider reading) o provide data which allow application of module learning in real world context o provide raw input to the production of the coursework essay • Select the most pertinent information for retrieval • Retrieve information • Re-assess the pertinence and assess the credibility of retrieved information • Properly reference/attribute information sources |
| Subject Specific Skills | • Develop skills in retrieval, assessment and criticism of the finance academic literature • Develop skills in interpretation and usage of finance and investment data • Develop competence to engage in ongoing debates on the development of finance theory and of financial products and markets |
| Team work | • Develop experience of team work and develop team working skills via small group working on self-study |
Notes
This module is at CQFW Level 7