Summary module description:

The primary focus of this module is on understanding the underlying economics behind how asset prices are determined and how portfolio allocation decisions are made. This includes having an understanding of 1) the theory of choice and the objects of choice faced by an investor; 2) the optimal portfolio decision; 3) equilibrium asset prices; 4) equilibrium portfolio allocations given price and risk preference.

Assessable learning outcomes:
Students should be able to explain how asset prices are determined. They should be able to explain how investment decisions under certainty and uncertainty are made. They should be able to explain and critique the most prominent theories seeking to explain how portfolios are constructed.

Additional outcomes:
Students will learn skills required to do relevant research, write reports, understand technical articles and apply theoretical knowledge to real world situations.

Outline content:
Basic topics include: inter-temporal optimisation of consumption, investment decision given certainty, expected utility theory, state preference theory, mean-variance portfolio theory, CAPM.

Brief description of teaching and learning methods:
Detailed guidance on the topics covered will be provided in the 10 x 2 hours weekly lectures (and 1 x 1 hour revision class), together with comprehensive handouts covering the material discussed, examples, exercises and solutions to facilitate understanding of key concepts. Students may be required to do exercises corresponding to each topic, to read a significant amount of journal articles, and to undertake research using the library, internet, etc.

Contact hours:
  Autumn Spring Summer
Lectures 21
Guided independent study 159 20
Total hours by term 180.00 20.00
Total hours for module 200.00

Summative Assessment Methods:
Method Percentage
Written exam 60
Project output other than dissertation 25
Class test administered by School 15

Other information on summative assessment:
Coursework will count for 40% of the overall mark and comprises: one mid-term test (15%) and one written project report (25%).

Formative assessment methods:

Penalties for late submission:
Penalties for late submission on this module are in accordance with the University policy. Please refer to page 5 of the Postgraduate Guide to Assessment for further information:

Length of examination:
One 2-hour unseen written paper, intended to be comprehensive of everything covered in the module.
Postgraduate examinations are held in the Summer term.

Requirements for a pass:
A minimum weighted average mark of coursework and examination of 50%.

Reassessment arrangements:
Re-examination for all modules takes place in August/September of the same year.
Re-assessment is by examination only; coursework is not included at the second attempt.

Additional Costs (specified where applicable):
1) Required text books: Financial Theory and Corporate Policy, by Thomas Copeland, J. Weston, Kuldeep Shastri, 4th Edition, Addison Wesley. Retail price ranges between £36 and £58.
2) Specialist equipment or materials:
3) Specialist clothing, footwear or headgear:
4) Printing and binding:
5) Computers and devices with a particular specification:
6) Travel, accommodation and subsistence:

Last updated: 21 December 2016

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