FE5002S - Investment (2020/21)
Module specification | Module approved to run in 2020/21 | ||||||||||
Module status | DELETED (This module is no longer running) | ||||||||||
Module title | Investment | ||||||||||
Module level | Intermediate (05) | ||||||||||
Credit rating for module | 15 | ||||||||||
School | Guildhall School of Business and Law | ||||||||||
Total study hours | 150 | ||||||||||
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Assessment components |
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Running in 2020/21(Please note that module timeslots are subject to change) |
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Module summary
The module focuses upon the theory and the practice of Financial Investments. The module will critically explore the current theoretical perspectives and consider their practical application in relation to investment strategies and corporate decision making.
The contents of the module covers a range of topics including financial Investment Strategies, valuation of securities and derivatives, bond portfolio immunisation, Risk and return, and evaluation of investment performance.
Analysis of theories in finance and investment and financial models include the Efficient Market Hypothesis, The portfolio Theory, The Capital Asset Pricing Model, the Arbitrage Pricing Theory and Dividend Valuation Model.
The module provides thorough knowledge of finance and guides students on assessing risks and managing risks for businesses and investment. The module builds up strong quantitative, written, critical and analytical skills required for employment in the finance industry.
A blended teaching and learning approach includes use of websites, videos, guest talks from industry and support for employability enhancing classroom activities.
Bloomberg will be used to deliver teaching sessions.
Syllabus
Dividend policy theory and practice: Modigliani–Miller and dividend irrelevancy; Relevancy theories; taxes and clienteles; signalling. LO1
Financial Investment Strategies: Active and passive trading strategies, fundamental analysis, technical analysis. Efficient markets Hypothesis; theory and empirical evidence, EMH testing methodology. Behavioural finance. LO1
Valuation of securities and derivatives: Equities, bonds, futures and options.LO1
Bond Portfolio Immunisation: term structure of interest rates, duration, immunisation of bond portfolios.LO1
Risk and return: statistical estimation of return and risk, Beta; types of risk; Diversification, portfolio theory, Capital Asset Pricing Model, Arbitrage Pricing Theory. Risk management, VaR, hedging and speculation with derivatives.LO2
Evaluation of investment performance evaluation: Sharpe and Treynor ratios, benchmark portfolios.LO2
Balance of independent study and scheduled teaching activity
Teaching is structured by lectures and seminars. The formal lectures of two hours will take place every week and these will be interactive, requiring students to participate in in-class exercises and discussion.
The lectures are be supported by one-hour seminars. Seminars typically provide a forum for discussion of class exercises based on either theory, case studies or the practical application of topics explored in the lecture. Some seminar time will be allocated to use of IT resources such as spreadsheets and retrieval and analysis of market data from sources such as Bloomberg.
Both lecture and seminar activities are structured to enable students to initially develop basic knowledge and then to progress to develop a deep and rich understanding of and analysis of investment. Class exercises require students to carry out independent work prior to seminars and explore their ideas in the class with their peers and the tutor.
Professional and transferable skills are developed in lectures and seminars, and through independent directed learning and assessment. Skills development is enhanced through problem solving practiced in seminars and preparing examinations. Initiative and independence is developed progressively throughout the module such that students are required to take greater responsibility of their work.
Learning outcomes
On completion of this module students will be able to:
1. evaluate the construction, selection and management of investment portfolios and critically understand the relationship between risk and return and the concept of corporate diversification.
2. demonstrate the quantitative, written, critical and analytical skills required for employment in the finance industry.
Assessment strategy
The summative assessment for this module consists of the assignment component as below:
Coursework: A group report of 3,000 words will be due in week 28. The weighting of this coursework will be 100%. This envisages group work and students will be required to form groups to undertake research activities, collect secondary data and prepare for the report. Groups will benefit from formative assessment provided by the tutor in addition to peer assessment provided by fellow students. The coursework will require students to demonstrate skills of researching, academic literature review, critical understanding of concepts and the ability to write a coherent report.
Feedback on assessments will be provided in accordance with University guidelines.
Bibliography
Textbooks:
Core Text
Pilbeam, K., (2018), Finance and Financial Markets, 4th Edition, Red Globe Press
Other useful texts
Brealey R.A., Myers S.C. and Franklin A., (2019), Principles of Corporate Finance. 13th Edition, McGraw Hill
Elton, E.J., Gruber, M.J., Brown, S.J. and Goetzmann, W. (2006). Modern Portfolio Theoryand Investment Analysis, 6th Edition,
Levy, H.(2003), Fundamentals of Investments. Pearson Education Limited
Lofthouse, S. (Editor), (1995), Readings in Investments. John Wiley. (Out of print but available in the library)
Redhead, K., (2003), Introducing Investment - a personal finance approach. Pearson Educational. Edinburgh.
Journals:
The Journal of Finance
The Journal of Economics and Finance
Internet Sources
http://www.hsbcnet.com/treasury/futures-and-options
http://www.bloomberg.com
http://www.thebigproject.co.uk/money.htm
http://www.duke.edu/~charvey/Classes/ba453/groups05.htm
Media:
Financial Times
Data Sources:
Bloomberg