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Unit of study_

FINC6001: Finance: Theory to Applications

This unit builds on the fundamental concepts introduced in FINC5001 Foundation in Finance. The central theme in this unit is the allocation problem. Corporate investment, funds management, asset allocation and risk management all require machinery for making an allocation decision - and these decisions are often made by teams or committees. The unit begins with more advanced aspects of corporate finance leading to Excel-based applications. After considering some interesting issues in social finance and corporate governance, students study advanced bond and stock pricing models. With these techniques in hand, securities trading is then considered, and the challenges around selecting active fund managers. The unit then moves to asset management, where large pools of capital are deployed across a range of asset classes, from equity and fixed interest to private markets and commodities. After considering risk pooling and risk management, the unit finishes with a discussion of group decision making and negotiation.

Code FINC6001
Academic unit Finance
Credit points 6

At the completion of this unit, you should be able to:

  • LO1. Interpret and analyse financial statements for firm valuation and other applications.
  • LO2. Explain the nexus between finance and challenges arising in areas of social and environmental needs and the corresponding association with corporate governance and ethics.
  • LO3. Calculate bond prices using the term-structure of interest rates.
  • LO4. Outline how securities are traded and identify issues associated with information, adverse selection and liquidity.
  • LO5. Summarise asset pricing models, their assumptions and applications.
  • LO6. Measure, interpret and classify the performance of active and passive management funds.
  • LO7. Calculate risk measures, interpret key results and management implications.
  • LO8. Explain and illustrate portfolio construction in an asset management context.
  • LO9. Practice the use of strategic models of decision-making in finance.