Finance

About

In this course, you will learn about the theory and application of Financial Securities and Corporate Finance. In three intensive weeks, you will explore financial instruments, such as equity, fixed income and derivative securities, as well as key concepts in Corporate Finance.

In Part 1: Asset Markets you will gain an integrated view of three important asset classes - fixed income securities, stocks and derivatives.

Fixed-income securities - such as Bonds - are used by governments and companies to raise finance. Our exploration of Stocks will build your knowledge of the key concepts of risk, return, diversification and portfolio theory, and the Capital Asset Pricing Model (CAPM) for describing the relationship between systematic risk expected return. We will look at market efficiency theory, and consider whether the market values stocks efficiently, or whether it is possible to “beat” the market to make abnormal returns leading to large profits.

You will also build an understanding of derivative instruments like forwards, futures, options and swaps, and their application in trading.

In Part 2: Corporate Finance you will gain an understanding of how firms analyse and decide which investment opportunities they should pursue, as well as the various options for raising the necessary funds to finance those investments.

On completion of the course, you will have a deeper understanding of how firms choose their capital structure, the conflicts between shareholders and debt holders that influence how firms are run, and incentives to adopt riskier strategies as a function of overall leverage.

Programme structure

- Net Present Value technique
- Introduction to portfolio theory
- The Capital Asset Pricing Model (CAPM)
- Stock market efficiency
- Forward and futures contracts, option pricing
- Investment decisions and the significance of real options
- Capital structure and dividend decisions
- Capital restructuring: Initial Public Offerings

Course leader

Dr Dong Lou and Dr Georgy Chabakauri

Target group

Undergraduate and Graduate students

Course aim

Students will learn about the theory and application of Financial Securities and Corporate Finance. The course broadly covers financial instruments, such as equity and fixed income and derivative securities, as well as key concepts in Corporate Finance. It will also enhance a student's understanding of how firms choose their capital structure, conflicts between shareholders and debt holders, pay-out policy, and initial public offerings.

Fee info