University of the West of England

MODULE SPECIFICATION

(Revised November 2002)                   

 

Code:   UPEN46-15-M   Title:    Finance II                                  Version: 1       

 

Level:  M                                 UWE credit rating: 15               ECTS credit rating: 7.5

 

Module type:  Standard

 

Owning Faculty: HLSS             Field:   Economics       

 

Valid from:       September 2004                        Discontinued from:

 

Pre-requisites:             None

 

Co-requisites:               Finance I

 

Excluded combinations:          None    

 

Learning outcomes:

 

Having successfully completed this module, students should be able to:

·         Show a critical awareness of the latest literature and current developments in selected areas of financial economics (components A & B)

·         explain and contrast various instruments traded in different markets and show a critical awareness of the appropriate use of such instruments (components A & B)

·         identify and apply key financial measures and ratios (Components A&B)

·         critically evaluate the insights offered by the yield curve (Component A)

·         show a critical understanding of the recent enthusiasm for deriving macroeconomic indicators from financial markets (Component A)

·         understand the pricing of various financial instruments (Components A & B)

·         show a high level of competence in the advanced financial functions in EXCEL (Component B)

·         show a high level and critical understanding of finance in the economy (Component A)

·         deal with complex issues and show evidence of self-direction and originality in tackling the problems thrown up by changes in financial theory and practice (Components A & B)

 

Syllabus outline:

           

·         Money markets

Characteristics, pricing and trading of money market instruments

·         Introduction to financial functions in EXCEL

Calculation of yields, discount rates and prices of selected money market instruments

·         Bond markets

Characteristics, pricing and trading of bonds, duration

·         Equity markets

Characteristics, pricing, estimation of beta coefficients

·         Derivative instruments

Characteristics and trading of financial futures, options and swaps

·         Financial markets as sources of information

The term structure of interest rates, the Fisher equation, interest rate spreads

           

Teaching and learning methods:

 

Several different teaching and learning methods will be used. Some sessions will be used to communicate core material and to deal with central concepts and models.  They may be interactive, giving a chance for questioning and debate on economic and financial issues raised in this module. Use may also be made of video recordings, with student tasks being linked where relevant to material in the videos.  There will also be sessions that involve a number of different formats such as group reporting on students’ results on modelling prices and returns on selected instruments using advanced functions in EXCEL, formal debates, discussion of assigned reading and presentations.

 

Indicative sources:      

Howells, P and K Bain, 2002, The economics of money, banking and finance, 2nd ed., Prentice                               Hall.

Elton, E J and Gruber, M J., 1995, Modern portfolio theory and investment analysis, 5th ed., John                              Wiley.

Blake, D., 2000, Financial Market Analysis, 2nd ed., John Wiley.

Stiglitz, G., 2001, The roaring nineties, Allen Lane.

Benninga, S., 2000, Financial Modelling, 2nd ed., MIT Press.

Jackson, M and M Staunton, 2001, Advanced modeling in finance using Excel and VBA, Wiley                               Finance.

Mayes, T R and T M Shank, 1996, Financial Analysis with Microsoft Excel, Dryden Press.

Dubofsky, D A and T W Miller Jr., 2003, Derivatives: Valuation and risk management, Oxford                                  University Press.

Pilbeam, K., 1998, Finance and Financial Markets, Macmillan.

Pilbeam, K., 1998, International Finance, 2nd ed., Palgrave.

 

Students will be expected to draw on current journal articles from:

 

Applied Economics

Applied Financial Economics

Economic Journal

Economic Review

European Economic Review

Journal of Economic Surveys

Journal of Finance

Journal of Financial Economics

Journal of Political Economy

Journal of Portfolio Management

Journal of Financial and Quantitative Analysis

Review of Economics and Statistics

 

Assessment

 

Weighting between components A and B (standard modules only)   A:  50%     B: 50%

 

ATTEMPT 1

 

First Assessment Opportunity

Component A

Description of each element                                                                Element weighting

1.  Unseen exam, 2 hours                                                                                   50%

 

Component B

Description of each element                                                                Element weighting

1.  Individual coursework assignment of up to 1500 words                          50%

 

 

Second Assessment Opportunity (further attendance at taught classes is not required)

Component A

Description of each element                                                                Element weighting

1.  Unseen exam, 2 hours                                                                                   50%

 

Component B

Description of each element                                                                Element weighting

1.  Individual coursework assignment of up to 1500 words                          50%

 

SECOND (OR SUBSEQUENT) ATTEMPT: Attendance at taught classes is not required.

 

Specification confirmed by  ……Module approved at VARSC 13.05.04.

 

Date ……………………………

(Associate Dean/Programme Director)