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Regular version of the site
2020/2021

Personal Investment Methods

Type: Minor
Delivered by: Department of Finance
When: 1, 2 module
Language: English
ECTS credits: 5

Course Syllabus

Abstract

Rational models of the classical theory of finance have much greater capabilities in the application of behavioral aspects, the main of which will be presented in this discipline. Target audience includes following three groups: – future financiers, consultants and analysts; – future academics interested in behavioral and classic theory of finance field; – general audience that is interested in the complicated world of finance.
Learning Objectives

Learning Objectives

  • The course aims to teach students methods of thinking in the field of investment using the methods and technologies of experimental economics.
Expected Learning Outcomes

Expected Learning Outcomes

  • Understand time value of money, patterns of financial decision making in increasing complexity of financial environment.
  • To know mathematics of finance theory and methodology of financial decisions.
Course Contents

Course Contents

  • Basics of Money, Bond, and Property Markets
    Interest rates and money market investments. Investing in bonds. Property investment and mortgages. Basics of Stock Markets. Stock exchanges. Stock indices. The rationale and conduct of regulation
  • Institutional Investments
    Mutual funds (unit trusts, OEICs, investment trusts). Life assurance and assurance-related investments. Pensions. The importance and significance of institutional investors
  • Capital Market Theory
    Portfolio diversification. Capital market theory:The capital asset pricing model. Capital market theory:Alternatives and criticisms
  • Portfolio Management
    Styles of portfolio construction. Evaluating the performance of fund managers
  • Investment Analysis
    The economic environment. Dividend discount models. Company accounts and economic value added. Ratio analysis. Technical analysis
  • Market Efficiency
    Market efficiency: Concepts and weak form evidence. Noise trading and behavioural finance Market anomalies. Further evidence on market efficiency. Stock market bubbles and crashes.
  • Stock Index Futures
    Stock index futures. Stock index futures prices. Hedging with stock index futures
  • Currency forwards, futures, swaps, and options
    Bond and Interest Rate Analysis. Bond prices and redemption yields. Duration and risk. Bond price convexity. Bond futures. Yield curves and interest rate futures. Interest rate swaps
  • Stock Options
    Stock options. Speculation with stock options. Hedging with options. Structured products. Warrants, convertibles, and split-caps. Option pricing and the Black-Scholes model. Variations on the basic Black-Scholes option pricing model.The binomial option pricing model
Assessment Elements

Assessment Elements

  • non-blocking Homework
  • non-blocking In-class activities
  • non-blocking Written assignment
  • non-blocking Final examination
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.5 * Final examination + 0.25 * Homework + 0.1 * In-class activities + 0.15 * Written assignment
Bibliography

Bibliography

Recommended Core Bibliography

  • Financial economics : a concise introduction to classical and behavioral finance, Hens, T., 2010
  • Redhead, K. (2008). Personal Finance and Investments : A Behavioural Finance Perspective. London: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=237524

Recommended Additional Bibliography

  • Richards, T. (2014). Investing Psychology : The Effects of Behavioral Finance on Investment Choice and Bias. Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=759584