Run by Bangor Business School
10.000 Credits or 5.000 ECTS Credits
Organiser: Prof John Ashton
Overall aims and purpose
To provide a solid grounding in the theory and practice relating to the principal asset classes.
The module will cover the following aspects: Investors, investment objectives and mechanics of investment; Investment risk and return; Portfolio theory and the Capital Asset Pricing Model; Valuation (time value of money); Equities (characteristics, valuation, world equity markets); Fixed Income securities (characteristics, world bond, valuation, understanding credit ratings and yield); and Investment management (Efficient Market Hypothesis, fundamental and technical analysis, and Investment management strategies).
Satisfactory standard 'D- to D+': No major omissions or inaccuracies in the deployment of information/skills. Some grasp of theoretical/conceptual/practical elements. Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives.
High Standard 'B- to B+': Very good performance Most of the relevant information accurately deployed. Good grasp of theoretical/conceptual/practical elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Evidence of the use of creative and reflective skills.
Excellent standard 'A- to A*': An outstanding performance, exceptionally able. The relevant information accurately deployed. Excellent grasp of theoretical/conceptual/practice elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Strong evidence of the use of creative and reflective skills.
C- to C+
Average Standard 'C- to C+': Much of the relevant information and skills mostly accurately deployed. Adequate grasp of theoretical/conceptual/practical elements. Fair integration of theory/practice/information in the pursuit of the assessed work's objectives. Some evidence of the use of creative and reflective skills.
Understand the mechanics of investment in financial markets and the main features of key world markets.
Understand approaches to selecting investments and the role of portfolio diversification, both across asset classes and geographically.
Apply basic valuation techniques to equity and fixed income instruments and show understanding of the principal drivers of returns.
Demonstrate understanding of the typical investment objectives of key classes of investors, including the risk-return relationship and the role of risk aversion.
|2-Hour written exam S1||75.00|
Teaching and Learning Strategy
One 2-hour lecture per week.
- Numeracy - Proficiency in using numbers at appropriate levels of accuracy
- Exploring - Able to investigate, research and consider alternatives
- Information retrieval - Able to access different and multiple sources of information
- Inter-personal - Able to question, actively listen, examine given answers and interact sensitevely with others
- Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
- Presentation - Able to clearly present information and explanations to an audience. Through the written or oral mode of communication accurately and concisely.
- Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
Subject specific skills
- knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
- Analysis, deduction and induction. Economic reasoning is highly deductive, and logical analysis is applied to assumption-based models. However, inductive reasoning is also important. The development of such analytical skills enhances students' problem-solving and decision-making ability.
- An appreciation of the nature of the contexts in which finance can be seen as operating, including knowledge of the institutional framework necessary for understanding the role, operation and function of markets and financial institutions (e.g. the economic, legal, regulatory and tax environment, both national and international; the firm; the capital markets and the public sector).
- A knowledge of the major theoretical tools and theories of finance, and their relevance and application to theoretical and practical problems (e.g. concept of arbitrage and examples of its use; financial mathematics and capital budgeting criteria; informational efficiency; optimal risk sharing; portfolio theory; asset pricing models and the valuation of securities; cost of capital; derivative pricing; risk management; information asymmetry; principal agency relationships; signalling; Fisher separation and capital budgeting criteria; behavioural finance; term structure and the movement of interest rates; determination of exchange rates and financial intermediation).
- An understanding of the factors influencing the investment behaviour and opportunities of private individuals (bonds, equities, and derivatives; risk aversion; risk/return trade-offs; portfolio management and performance measurement; pensions and long term savings; the tax treatment of savings and investments; international diversification; forex risk; objectives of and constraints on institutional investors and advisors).
- An understanding of financial service activity in the economy, and an appreciation of how finance theory and evidence can be employed to interpret these services (for example, information asymmetry, adverse selection and moral hazard could be employed to analyse the fundamental nature of services, such as insurance, pensions, bank lending and consumer credit, and also explore fundamental problems arising in such financial service provision. Efficient market hypothesis could be used to explore evidence for fund manager performance and the effectiveness of equity and bond saving services).
- Problem solving and critical analysis: analysing facts and circumstances to determine the cause of a problem and identifying and selecting appropriate solutions.
- Numeracy: the use of quantitative skills to manipulate data, evaluate, estimate and model business problems, functions and phenomena.
Resource implications for students
Talis Reading listhttp://readinglists.bangor.ac.uk/modules/etb-2217.html
Bodie, Z., Kane, A. and Marcus, A.J. (2019). Essentials of Investments. 11th edition, McGraw-Hill.
McGraw-Hill. Pilbeam, K. (2018). Finance and Financial Markets. 2nd Edition, Palgrave Macmillan.
Courses including this module
Compulsory in courses:
- N325: BSc Finance, Investment & Risk year 2 (BSC/FIR)