Financial Market Theory

Overview

Portfolio theory; market efficiency; security analysis: equity, fixed income, and derivatives securities; portfolio management; portfolio performance.

Learning Objectives

Upon successful completion of this module students will:
have an understanding of the constraints faced by fund-managers when constructing portfolios to meet investors financial objectives.
have a theoretical and practical understanding of CAPM and factor models.
have an appreciation of the risk and returns characteristics of the major asset classes and their importance when constructing portfolios to meet investors' investment objective(s).
be able to apply valuation methodologies to the analysis of securities: equities, bonds, and derivatives.
have an understanding of how derivatives securities are used in risk-management.
be able to critically evaluate portfolio evaluation methodologies.

Skills

Quantitative analysis, problem solving, logical reasoning, ability to evaluate/interpret financial data.

Assessment

Students must achieve an overall mark of 40% in the module to pass