Dr James Clark

This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), MBA Exchange, MSc in Financial History, MSc in Management and Strategy, MSc in Real Estate Economics and Finance, MSc in Regulation and Master of Public Policy. This course is available as an outside option to students on other programmes where regulations permit.

• Students on the MSc in Accounting, Organisations and Institutions need permission from the Programme Director to enrol in this course.
• Students on the Diploma in Accounting and Finance need permission from the Programme Director to enrol in this course.
• This course is not open to students in the MSc Accounting and Finance and students from the following departments: Economics, Finance, Mathematics, and Statistics.
• This course cannot be combined with Asset Markets A (FM429)

This course has a limited number of places (it is controlled access). In previous years we have been able to provide places for all students that apply but that may not continue to be the case.

This course does not permit auditing students.

The course assumes no previous knowledge of finance, economics, and statistics, and requires only basic knowledge of mathematics. However, the course is quantitative and students must be willing to learn and work with new concepts in mathematics and statistics. Course work will involve a significant amount of algebra and numerical exercises. 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.

This course is a self-contained introduction to finance and it covers roughly the same topics as FM429. 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. In addition, the course also covers some core corporate finance questions, such as capital structure choices.

The course is also related to FM474 (Managerial Finance): both are introductory courses in Finance. FM473 focuses mostly on understanding the workings of financial markets, the determination of asset prices, and the decisions made by financial investors.  FM474 studies financial decisions from the perspective of firms (i.e., “Corporate Finance”). Although there is some small amount of overlap between FM473 and FM474, both courses can be taken simultaneously or sequentially, in any order.

30 hours of lectures in the AT.

This course is taught in the interactive lecturing format. There is no distinction between lectures and classes/seminars; there are “sessions” only, and the pedagogical approach in each session is interactive. There will be ten three-hour sessions. Attendance is required.

This course is taught twice, in both Autumn and Winter Term. Students must either register for FM473A which is taught in Autumn Term, or FM473W which is taught in Winter Term.

Brealey, Myers ,Allen, and Edmans, Principles of Corporate Finance.

Exam (100%, duration: 2 hours, reading time: 15 minutes) in the January exam period.