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Consider a framework for evaluating the financial performance of a company, forecasting its future performance and
estimating its fundamental value. Consider the relative usefulness of cash flow and profit data for assessing financial
performance and the use of ratio analysis for evaluating past performance and forecasting future financial
performance.
Topics covered include:
Financial statements and their use in financial analysis; financial reporting and IFRS; reformulation of financial
statements; ratio analysis and forecasting financial performance; cash flow and accounting valuation models;
valuation theory in practice; financial statement analysis; market efficiency and earnings management; issues and
developments in financial reporting and statement analysis; corporate governance and management
communication, financial statement quality and the cost of capital.
Assessment consists of an individual project worth 80% of the final mark and a group presentation worth 20%.
Financial Risk Management
Examine financial risk management and the techniques to assess financial risks according to the regulatory
framework, having the management of risk exposure in view. Learn the quantitative methods of risk measurement
and risk management.
Topics covered include:
How to identify financial risks; coherent risk measures; models for uncertainty; numerical tools – Monte Carlo
simulation; approximations and factor reduction; Bayesian uncertainty – parameter risk; The regulatory framework
of financial risk management.
Assessment consists of a module test during Term 2 worth 20% of the final mark and a two-hour examination in
Term 3 (April/May) equivalent to 80%.
Fixed Income and Credit Risk
Explore the tools for the assessment and management of fixed income and credit risk.
Topics covered include:
Bonds and Money-Market Instruments; Bond Prices and Yields; term structure of interest rates; Martingale pricing;
continuous-time stochastic processes; affine term structure models; credit risk management; structural and intensitybased
credit risk modelling; credit derivatives.
Assessment consists of a module test and a group project each worth worth 10% of the finak mark, and a a two-hour
examination in Term 3 (April/May) worth 80%.
International Financial Markets
Consider of the theory and evidence relating to international financial markets, and in particular the foreign
exchange market.
Topics covered include:
Efficiency of the Foreign Exchange (Forex) Market; Purchasing Power Parity and the Real Exchange Rate; Exchange
Rate Determination; Forecasting Exchange Rates; Exchange Rate Models and Economic Value; Official Intervention in
the Forex Market; The Microstructure of the Forex Market; Active Management of Forex Portfolios.
Assessment consists of a module test during Term 2 worth 20%. Of the final mark and a two-hour examination in
Term 3 (April/May) equivalent to 80%.
International Financial Management
Explore corporate financial decision-making within the context of the increasing globalisation of business, exchangerate
volatility, and the internationalisation of financial markets. Extend your understanding of the theory of
corporate financial management, covered in the Foundations of Corporate Finance core module, to an international
setting.
Topics covered include: