FM473 Half Unit
Finance I
This information is for the 2016/17 session.
Teacher responsible
Dr Georgy Chabakauri
Dr Angeliki Andrikogiannopoulou
Availability
This course is available on the CEMS Exchange, IMEX Exchange, MSc in International Management, MSc in Management, MSc in Management (CEMS MIM), MSc in Management (MiM Exchange), MSc in Management of Information Systems and Digital Innovation, MSc in Real Estate Economics and Finance, MSc in Risk and Finance and MiM Exchange. This course is available with permission as an outside option to students on other programmes where regulations permit.
This course is not open to students in the MSc Accounting and Finance and in the MSc Finance and Economics.
Pre-requisites
Students should be comfortable with 'High School' level Mathematics and simple algebra, e.g. the ability to solve linear systems of two equations and two unknowns.
Course content
New Present Value: The goals of the firm. Interaction of firms and capital markets. Asset valuation with known cash flows. Bond valuation: Term structure of interest rates. Forward rates and loans. Duration. Stock valuation: The Gordon growth model and variants. The functioning of equity markets. Risk and return: What is risk? The portfolio frontier. Capital Asset Pricing Model (CAPM) What is the price of risk? The capital markets model. Alternatives to CAPM. Market efficiency Valuation of risk cash flows. Capital budgeting. A first course in financial analysis for students with a basic knowledge of management. The course explores the way that firms and the capital market function to channel savings toward productive investments. From the investor's perspective it considers characteristics of the major financial contracts and the principles used in their valuation. It considers how investors should select their portfolios and the implications of this behaviour for pricing assets in stock and bond markets. It explores the question of whether stock markets are efficient in reflecting investors information. It applies these insights to the firm's financial management decision of whether or not to invest in a risky project and how to select among alternative investments.
Teaching
30 hours of lectures in the MT. 30 hours of lectures in the LT. 3 hours of lectures in the ST.
Ten three-hour lecture and seminar sessions. This course is taught twice, in both Michaelmas and Lent Term. Students must either register for FM473 A which is taught in Michaelmas Term, or FM473 B which is taught in Lent Term
Indicative reading
Brealey, Myers and Allen, Principles of Corporate Finance.
Assessment
Exam (100%, duration: 2 hours) in the main exam period.
Key facts
Department: Finance
Total students 2015/16: Unavailable
Average class size 2015/16: Unavailable
Controlled access 2015/16: No
Value: Half Unit
Personal development skills
- Problem solving
- Application of numeracy skills