Personal Investment Methods
- The course aims to teach students methods of thinking in the field of investment using the methods and technologies of experimental economics.
- 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.
- Basics of Money, Bond, and Property MarketsInterest 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 InvestmentsMutual funds (unit trusts, OEICs, investment trusts). Life assurance and assurance-related investments. Pensions. The importance and significance of institutional investors
- Capital Market TheoryPortfolio diversification. Capital market theory:The capital asset pricing model. Capital market theory:Alternatives and criticisms
- Portfolio ManagementStyles of portfolio construction. Evaluating the performance of fund managers
- Investment AnalysisThe economic environment. Dividend discount models. Company accounts and economic value added. Ratio analysis. Technical analysis
- Market EfficiencyMarket 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 FuturesStock index futures. Stock index futures prices. Hedging with stock index futures
- Currency forwards, futures, swaps, and optionsBond 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 OptionsStock 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
- Interim assessment (2 module)0.5 * Final examination + 0.25 * Homework + 0.1 * In-class activities + 0.15 * Written assignment
- 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
- 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