Module ASB-2203:
Finance

Module Facts

Run by Bangor Business School

10 Credits or 5 ECTS Credits

Semester 1

Organiser: Dr David Ayling

Overall aims and purpose

To examine the concepts and principles underlying key financial decisions. To provide an introduction to corporate finance.

Course content

The content may inlude but will not be limited to:

Present value and the opportunity cost of capital; Net present value and alternative methods of investments appraisal; Project analysis; Financial planning and analysing financial performance.

Assessment Criteria

threshold

D- to D+; Demonstration of basic understanding of key concepts and analytical techniques but with significant mistakes and little development of the subject beyond the lecture material.

good

B- to B+; Good understanding of key concepts and good analytical skills together with evidence of reading and research beyond the lecture material, but with some minor theoretical or practical errors.

excellent

A- to A*; Comprehensive and creative understanding of concepts and analytical techniques, together with significant evidence of engagement and understanding of wider reading in this area.

C- to C+

C- to C+; Demonstration of broad and sound understanding of key concepts and analytical techniques, but with significant mistakes and little development of the subject beyond lecture material.

Learning outcomes

  1. Understand the nature of risk and return in finance;

  2. Apply techniques for financial valuation and rules for capital investment;

  3. Analyse financial performance;

Assessment Methods

Type Name Description Weight
COMPREHENSION TEST Online Test

Online test consisting of 13 multiple-choice questions of varying levels of difficulty to be completed in the students' own time. The test is not time-limited but well-prepared students should be able to complete most questions within 10 minutes but other questions require detailed calculations which may take up to 1 hour.

25
EXAM Formal examination 1.5 hrs.

1.5 hour closed-book exam.

75

Teaching and Learning Strategy

Hours
Lecture

One 2 hour lecture per week.

20
Private study

Private study: reading, reflection, practicing techniques.

80

Transferable skills

  • Literacy - Proficiency in reading and writing through a variety of media
  • Numeracy - Proficiency in using numbers at appropriate levels of accuracy
  • Computer Literacy - Proficiency in using a varied range of computer software
  • Self-Management - Able to work unsupervised in an efficient, punctual and structured manner. To examine the outcomes of tasks and events, and judge levels of quality and importance
  • Information retrieval - Able to access different and multiple sources of information
  • 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.

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).
  • Abstraction. From the study of economic principles and models, students see how one can abstract the essential features of complex systems and provide a useable framework for evaluation and assessment of the effects of policy or other exogenous events. Through this, the typical student will acquire proficiency in how to simplify while still retaining relevance. This is an approach that they can then apply in other contexts, thereby becoming more effective problem-solvers and decision-makers.
  • 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.
  • Quantification and design. Data, and their effective organisation, presentation and analysis, are important in economics. The typical student will have some familiarity with the principal sources of economic information and data relevant to industry, commerce, society and government, and have had practice in organising it and presenting it informatively. This skill is important at all stages in the decision-making process.
  • Framing. Through the study of economics, a student should learn how to decide what should be taken as given or fixed for the purposes of setting up and solving a problem, i.e. what the important 'parameters' are in constraining the solution to the problem. Learning to think about how and why these parameters might change encourages a student to place the economic problem in its broader social and political context. This 'framing' skill is important in determining the decision-maker's ability to implement the solutions to problems.
  • 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 relationship between financial theory and empirical testing, and application of this knowledge to the appraisal of the empirical evidence in at least one major theoretical area. The appraisal should involve some recognition of the limitation and evolution of empirical tests and theory (eg the efficient markets hypothesis; anomalies; pricing of derivatives and other securities; bond portfolio management; exchange rates; raising capital and capital structure).
  • An understanding of the financing arrangements and governance structures of business entities, and an appreciation of how theory and evidence can be combined to assess the effectiveness and efficiency of such arrangements (e.g. decisions as to sources of finance and financial structure; the pricing of corporate securities; the market for corporate control; corporate governance structures and mechanisms; financial planning and international dimensions of finance).
  • 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).
  • 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.
  • Articulating and effectively explaining information.
  • Conceptual and critical thinking, analysis, synthesis and evaluation.
  • Self-management: a readiness to accept responsibility and flexibility, to be resilient, self-starting and appropriately assertive, to plan, organise and manage time.

Resources

Courses including this module