Modules: MSc Financial Economics

Students take four core modules in period one. In the second period, students take one further core and two elective modules along with a Research Methods Seminar to help with their project research on an appropriate area of financial economics. All students are required to submit a dissertation on their project of no more than 10,000 words.

Core Modules (compulsory)

ECM016 Economics of Financial Markets

ECM014 Topics in Corporate Finance

ECM017 Macroeconomics

ECM012 Financial Econometrics

ECM013 Financial Derivatives

ECM018 Financial Economics Project (Dissertation)

ECM022 Microeconomics

ECM023 Asset Pricing

Elective modules (choose two from the list)

ECM011 International Money and Finance

ECM019 Numerical Methods for Financial Economic Analysis

ECM020 Financial Regulation

ECM108 Econometrics

Module Outlines

ECM011 International Money and Finance (20 Credits)

This module is designed to extend and deepen students' understanding of key issues relating to finance in open economy contexts. Many of the issues covered, such as the impact of financial market integration on a country's monetary autonomy are of vital importance to policy makers and an advanced exposure to these issues will help prepare students for the challenges of careers in the financial industry as well as in government and multilateral bodies.

ECM012 Financial Econometrics (20 Credits)

This module studies the statistical properties of financial time series. These properties have motivated in the last two decades the development of specific econometric models to describe and forecast the dynamics of such time series. This module reviews the various methods found in the literature stressing the use of innovative procedures to model the distribution of financial returns, dynamics of volatility and cross-dependence and the use of modern software. Applications of these techniques are found in Risk Management, Portfolio Theory and Financial Engineering.

We introduce the students to the concepts and techniques of arbitrage pricing in discrete and continuous time. We review some basic probability concepts, and introduce the techniques of change of measure and numeraire. We discuss the risk-neutral valuation principle in multiperiod securities markets, with applications to options, futures, bonds and interest rate derivatives. We study the necessary tools of stochastic calculus including Ito's lemma and Girsanov Theorem and derive the Black-Scholes equation for vanilla options. We generalize to the case of stochastic interest rate and introduce the most popular short-rate rates models.

ECM014 Topics in Corporate Finance (20 Credits)

The aim of the module is to familiarize the students with the advanced topics in corporate finance such as cash flow analysis under uncertainty, evaluation of investment opportunities, optimal capital structure in different market environments, bankruptcy, dividend policy, conflict of interest between groups involved in decision making, and issues of asymmetric information and agency problems. The module pays special attention to the real option approach to strategic management which applies financial options theory to investment decisions under conditions of uncertainty.

ECM016 Economics of Financial Markets (20 Credits)

The module is one of the building blocks of the programme. It familiarises students with key concepts in the field of finance and provides an introduction to the functioning of financial markets. The module follows by exploring money and capital markets and explaining different investment instruments traded therein. An important part of the course entertains the role of interest rates in debt markets and the no-arbitrage valuation of bonds. The module finishes with the introduction of financial derivatives. This includes understanding no-arbitrage pricing techniques for swaps, forwards and futures derived from debt markets, and for stock options from equity markets.

ECM017 Macroeconomics (20 Credits)

Macroeconomics relates the consequences of individual decisions and actions to aggregate outcomes and this is particularly important for the conduct of finance in a globalising world. The module is designed to focus on macroeconomic issues facing central banks as they attempt to pursue macroeconomic stability.

ECM018 Financial Economics Project (40 Credits)

The aim the project is for the student to learn the skills required to undertake a piece of independent research and familiarise themselves with recent academic research in their chosen area. The student will also learn various sources of economic research and data.

ECM019 Numerical Methods for Financial Economic Analysis (20 Credits)

Many problems in Financial Economics require some calculation. Most of these can be performed with very easy input and output usuing the facilities provided by Excel, which is widley used in business. This module covers key aspects of computer and IT based methods for financial calculations. It teaches students how to use Excel, combined with and Visual Basic for practical computations which implement the basic theories of finance.

ECM020 Financial Regulation (20 Credits)

Banking, securities, and personal finance markets operate in a variety of regulatory frameworks. This module aims to develop a critical understanding of the rationale and objectives of financial regulation and its impact on the operation of markets. We consider the regulation of systemic risk exposure, financial market cleanliness, and consumer protection.

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ECM022 Microeconomics (20 Credits)

This module is designed to provide students with an intermediate level of microeconomics. The topics covered are the theory of the consumer and the theory of the firm, as well the basics of the market equilibrium.

ECM023 Asset Pricing (20 Credits)

The cource provides and overview of the central topics in Asset Pricing and the Portfolio Theory, with a particular focus on the relationship between asset princing and macroeconomic issues.

ECM108 Econometrics (20 Credits)

The module is desinged to provide the students with an advanced level of applied econometrics and economet theory.