School of Management, Unit Catalogue 2010/11 |
MN20026: Economic analysis of financial decisions |
 Credits:
| 6 |
| Level:
| Intermediate |
| Period: | This unit is available in... |
| Semester 1 |
| Assessment:
| EX 100% |
| Supplementary Assessment: | Like-for-like reassessment (where allowed by programme regulations) |
| Requisites:
| Before taking this unit you must take MN10008 or take MN10069 or take MN10248 |
| Description:
| Aims: This module introduces students to the principal tools of economic analysis used in financial decision making. It introduces students to the key principles of discounted cash flows, theories of asset pricing, valuation of alternative financial instruments, and will provide students with a critical understanding of portfolio diversification and the methods of valuation. Learning Outcomes: At the end of this module students will be able to: 1. understand the time value of money and the calculation of present values 2. construct a diversified portfolio 3. critically evaluate the theory of efficient markets 4. value equity and fixed-income financial instruments 5. differentiate between different types of options 6. understand the principles of hedging. Skills: Numerical facility with accounting and financial data, and identification/conversion to relevant economic data for decision-making. Content: Week 1 - Time value of money and present values Week 2 - Calculating Present Values Week 3 - Value of Equity and Bonds Week 4 - Risk, Return and the Cost of Capital Week 5 - Portfolio Theory and Asset Pricing Equilibrium Week 6 - Lessons of Market Efficiency Week 7 - Put and Call Options Week 8 - Options Pricing Theory Week 9 - Valuing Government Bonds Week 10 - Forwards and Futures Week 11- Revision. |