Module Information

Module Identifier
Module Title
Academic Year
Semester 1 (Taught over 2 semesters)

Course Delivery

Delivery Type Delivery length / details
Lecture 2 lectures per week


Assessment Type Assessment length / details Proportion
Semester Assessment 2,000 word essay  20%
Semester Exam 3 Hours   80%
Supplementary Exam 3 Hours   100%

Learning Outcomes

On successful completion of this module students should be able to:

analyse and evaluate theoretical and practical aspects of the following areas:

  • financial asset pricing models, including state preference theory;

* neoclassical (rational) and behavioural perspects on financial markets;

* selected current issues in financial markets and institutions;

* theories of financial intermediation;


This module is taught over two semesters. The aim of the module is to provide students with an understanding of the modern financial environment: from financial markets and institutions, basic concepts of risk and return, through to modern financial instruments with specific reference to securitisation and foreign exchange and derivatives markets. The module also concentrates several lectures at a firm-specific level, focusing on corporate finance and asset pricing. Specifically, the lectures will provide a review of asset pricing, capital asset pricing models, valuation of fixed and variable income securities and option pricing with specific reference to the Black-Scholes option pricing models.

Brief description

The first part of the module focuses on various pricing approaches for financial assets. We then address current issues in financial market research, notably market microstructure. The final element of the module is focused on financial institutions, with particular emphasis on capital adequacy and credit risk.


(i) Introduction to financial markets
(ii) Principles of banking and financial intermediation
(iii) Risk and regulation in banking (1)
(iv) Risk and regulation in banking (2): credit risk.
(v) Market efficiency and the efficient markets hypothesis
(vi) Efficient market anomalies and behavioural finance
(vii) Market microstructure
(viii) Financial markets and modern financial instruments
(ix) Mechanics of foreign exchange and foreign exchange markets
(x) Relevant current issues within the global financial markets
(xi) Financial derivatives
(xii) Valuing financial assets, bonds, stocks and options (1)
(xiii) Valuing financial assets, bonds, stocks and options (2)
(xiv) The pricing of assets and portfolio theory
(xv) Capital asset pricing and arbitrage pricing theory

Reading List

Recommended Text
Blake, D. (2000) Financial Market Analysis 2nd edition Wiley Primo search Buckle, M and Thompson J. (2004) The UK Financial System: Theory and Practice 4th edition Manchester University Press Primo search Howells, P. and Bain, K. (2005) The economics of money, banking and finance 3rd Edition Prentice Hall Primo search Hull, J. C. (2009) Options, Futures and Other Derivatives, 7th Edition Pearson Education Primo search


This module is at CQFW Level 7