Quantitative methods for
financial management
[C219]
This course introduces some of the quantitative
methods of financial management which are
commonly used by financial analysts, firms’
managers and individual investors. It examines
techniques for the valuation of different
classes of securities, analyses criteria for
guiding investment decisions, considers the
measurement of asset risk and return and
discusses statistical techniques of forecasting.
The MICROFIT computer package is provided for
regression analysis and diagnostic procedures.
The aim of the course is to give students
confidence and skill in the use of the
mathematical and statistical methods used in the
analysis of financial instruments and financial
markets, including the calculation of financial
market yields and prices, frequency
distributions, risk and probability, correlation
and regression analysis. Statistical inference,
the multiple linear regression model,
autocorrelation, and risk reassessment and
investment are all topics covered in the course,
which teaches not only the relevant theoretical
concepts but, in the belief that quantitative
techniques can only be learned by doing, gives
abundant practice in the manipulation of
numerical material with problems and exercises.
[Top]
Corporate finance
[C221]
The theories, examples, and empirical studies in
Corporate finance which are discussed in this
course concentrate on the finance of
corporations whose shares are traded on a well
organised stock market. The purpose of the
course is to explain the observable financial
decisions of corporations and portfolio
managers, and to interpret the behaviour of the
securities markets which results from the
decisions of those and other agents.
Traditionally, the securities markets considered
in corporate finance are ‘spot’ or ‘cash’ stock
markets dealing in company shares and bonds. But
modern finance also includes large and growing
markets in ‘derivatives’, especially options and
futures, which are contracts relating to the
future prices of the underlying shares or bonds.
To ‘explain the behaviour’ of any of the
financial markets involves explaining how the
prices of shares, bonds and derivatives are
determined. The course aims to enable students
to understand and analyse the theoretical
principles relating to corporate finance, and
the controversies and criticisms which surround
these theoretical propositions. It focuses on
the relation between corporations’ decisions on
investing in productive (‘physical’) assets and
issuing financial liabilities, and the markets
in the financial liabilities (equities and debt)
which they issue. The theorems concerned with
corporations’ decision problems which the course
examines include the Net Present Value Rule, the
Modigliani-Miller Theorem on Dividend Policy and
their earlier seminal Theorem on Debt-Equity
Ratios, and Agency Theory; and the main theorems
focusing on the Operation of Financial Markets
analysed are the Efficient Markets Hypothesis,
the Capital Asset Pricing Model, and the Theory
of Option Pricing.
[Top]
Corporate governance
[C244]
This course analyses legal/political/economic
features of major corporate governance systems,
examining how corporate governance systems
influence the performance of individual firms
and the allocation of capital within a country.
It investigates the evolution of diverse
ownership and governance structures across
different economies.
Unit 1 Definitions of corporations and
corporate governance
Unit 2 Theory of the firm
Unit 3 Corporate governance and the role of
law and the state
Unit 4 Corporate governance systems:
equity-led, bank-led and family-led
Unit 5 Control and board composition
Unit 6 Control and CEO compensation
Unit 7 International corporate governance
Unit 8 Corporate governance guidelines and
codes of best practice in developed, developing
and transition economies
[Top]
Banking and capital markets
[C226]
This course covers the role of banking and
finance in the economy. It introduces some of
the central issues and ideas in modern theories
of banking and finance in the light of recent
thinking about the relationship between banking,
finance and the real economy. In this course,
finance is examined within a general framework
concentrating on the experience of advanced
capitalist economies, including an introduction
to the current concern with derivatives. As a
contrast, applications to less developed
economies are also, briefly, considered. The
course is organised around four principal
themes: the relationship between financial
markets, financial institutions, and the
economy’s real investment and savings; the
trade-off between risk and expected returns and
their links to information and monitoring; the
efficiency of financial markets; and the
dialectic between regulation and deregulation or
liberalisation of financial markets.
[Top]
Finance in the global market
[C242]
Financing the global firm: multinational cost of
capital and capital structure; sourcing debt and
equity globally. Measuring and managing foreign
exchange exposure. Foreign investment decisions.
Corporate strategy and foreign direct
investment. Foreign ventures. International
portfolio investment. Multinational capital
budgeting. International acquisitions and
valuation. Country risk analysis. Multinational
taxation. Legal aspects of foreign direct
investment and multinational corporations.
[Top]
Bank
regulation and resolution in banking crises
[C356]
Bank crises occur frequently in many countries
and across many time periods. Many go beyond the
distress of individual banks and have systemic
effects, threatening the banking system as a
whole. Since the nineteenth century governments
and central banks have developed increasingly
sophisticated methods to regulate banks in order
to minimize the risk of bank distress and
intervention tools to mitigate its effect. Since
crises recur, as in the USA and United Kingdom
in 2007, they motivate heightened discussion of
the merits of regulation and intervention and
their design. In this course you study technical
aspects of bank regulation, supervision, and
intervention to resolve crises. It relates the
techniques to fundamental principles and to
examples of countries' experience.
[Top]
Bank financial management
[C222]
This course has a somewhat more practical
orientation than many other courses in the MSc
programme, focusing as it does on the
microeconomic problems of financial management
of banking firms. This does not mean, however,
that the course is devoid of theoretical
interest. It also raises some new theoretical
problems for consideration, many of them
concerned with the way we need to conceptualise
the banking firm. This course examines the role
and importance of bank financial management to
the modern bank. It teaches the basic models of
financial management taught by University
Economics Departments and Business Schools,
which were constructed from the experience of
mature capitalist economies. The course
discusses the various trends shaping banking
markets, such as institutionalisation,
securitisation, globalisation and concentration.
Among its aims are the following: to set the
banking firm in the context of a changing
financial services industry; to look at the role
of the financial manager within the banking
firm; to examine bank capital and capital
structure, and to consider the question of the
adequate regulation of the banking sector to
ensure its safety, to preserve bank liquidity
and prevent bank failures.
