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ES30081: Financial theory and applications

Follow this link for further information on academic years Academic Year: 2013/4
Further information on owning departmentsOwning Department/School: Department of Economics
Further information on credits Credits: 12
Further information on unit levels Level: Honours (FHEQ level 6)
Further information on teaching periods Period: Academic Year
Further information on unit assessment Assessment: CW 20%, EX 60%, OT 20%
Further information on supplementary assessment Supplementary Assessment: Reassessment not allowed
Further information on requisites Requisites: In taking this unit you cannot take MN30380
Further information on descriptions Description: Aims:
The aim of this year long unit is to provide students with a rigorous understanding of the financial system and economic environment in which financial and investment decisions are made.
The unit will consider the role of financial markets in shaping the operating and financing decisions of firms. The material covered is fundamental to help understand the causes, nature and significance of recent financial crises and how they affect the real economy. It should also help the student to access the effectiveness of monetary policy and regulation
A substantial number of final year students have undertaken placements or internships with financial institutions and this unit will provide a mix of theory and practice integrating their experience whilst on placement with academic precision, enhancing their employability.

Learning Outcomes:
By the end of the unit the student should demonstrate:
* An understanding of the structure of financial markets with particular reference to their information structure
* The ability to apply the theoretical concepts employed for asset pricing
* The capacity to critically evaluate the informational requirements for the efficient operation of financial markets
* An understanding of how financial institutions interact with, and affect, the wider economy.
* Comprehension of the importance and influence of monetary policy for the financial markets
* Appreciation of the motives and limitations of regulation.

Quantitative/econometric (T.F,A)
Analytical (T,F,A)
Communication {written, oral} (F,A)
Group work (F,A)

This unit introduces the theory of financial markets their efficient operations and informational limitations. It integrates modern theories of asymmetric information into the analysis of financial institutions, relating the theory to current developments and empirical evidence
Topics to be covered include: Modern financial theory and its applications, including risk theory, market equilibrium asset pricing models, term structure of interest rates, efficient market theory, monetary policy, capital structure theory and applications including issues surrounding financial distress, bankruptcy and credit risk, informational asymmetry and advanced topics in capital budgeting.
Further information on programme availabilityProgramme availability:

ES30081 is Optional on the following programmes:

Department of Economics
  • UHES-AFB03 : BSc (hons) Economics (Full-time) - Year 3
  • UHES-AKB03 : BSc (hons) Economics (Full-time with Thick Sandwich Placement) - Year 4
  • UHES-AFB02 : BSc (hons) Economics and International Development (Full-time) - Year 3
  • UHES-AKB02 : BSc (hons) Economics and International Development (Full-time with Thick Sandwich Placement) - Year 4
  • UHES-AFB01 : BSc (hons) Economics and Politics (Full-time) - Year 3
  • UHES-AKB01 : BSc (hons) Economics and Politics (Full-time with Thick Sandwich Placement) - Year 4
Department of Mathematical Sciences
  • USMA-AFB15 : BSc (hons) Mathematical Sciences (Full-time) - Year 3
  • USMA-AKB16 : BSc (hons) Mathematical Sciences (Full-time with Thick Sandwich Placement) - Year 4
  • USMA-AAB16 : BSc (hons) Mathematical Sciences with Study Year Abroad (Full-time with Study Year Abroad) - Year 4
  • USMA-AFB05 : BSc (hons) Statistics (Full-time) - Year 3
  • USMA-AKB06 : BSc (hons) Statistics (Full-time with Thick Sandwich Placement) - Year 4
  • USMA-AAB06 : BSc (hons) Statistics with Study Year Abroad (Full-time with Study Year Abroad) - Year 4

* This unit catalogue is applicable for the 2013/4 academic year only. Students continuing their studies into 2014/15 and beyond should not assume that this unit will be available in future years in the format displayed here for 2013/14.
* Programmes and units are subject to change at any time, in accordance with normal University procedures.
* Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.