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Regular version of the site

Theory of Finance

2021/2022
Academic Year
ENG
Instruction in English
3
ECTS credits
Delivered at:
Практико-ориентированные магистерские программы факультета экономических наук
Course type:
Compulsory course
When:
1 year, 2 module

Instructor

Course Syllabus

Abstract

Theory of Finance covers the basic principles and fundamental quantitative theories of pricing and valuation of various types of financial assets including stocks, bonds and derivatives. The contents of the course correspond to CFA Level 1. The course is a required core course of the online degree Master program “Business analytics and strategic business reporting” and is designed to ensure the basic professional competences of the master in the field of finance. Theory of Finance is necessary for the further study of more complicated financial courses, such as Corporate Finance, Financial Modelling and Risk Management.
Learning Objectives

Learning Objectives

  • Developing basic economic and financial analysis skills to make reasonable investment decisions and conduct fundamental research in finance.
  • Introduction to the most common asset pricing models used by academic researchers and financial market analysts to determine the fair value of various financial instruments.
  • Understanding the key assumptions and limitations of these models in order to apply them correctly.
Expected Learning Outcomes

Expected Learning Outcomes

  • Apply basic financial models, understand their features and limitations;
  • Be able to identify economic problems when analyzing specific types of financial instruments, evaluate the expected results;
  • Know how to use various information and data sources to analyze and process data for economic and financial estimations;
  • Make efficient investment decisions in uncertainty;
  • Obtain practical experience in applying and testing the validity of asset pricing models using real quantitative data;
Course Contents

Course Contents

  • Introduction to financial markets
  • Essentials of financial calculations
  • Bond pricing
  • Equity pricing
  • Risk and return
  • Portfolio theory
  • Capital asset pricing model (CAPM)
  • Factor models and Arbitrage pricing theory (APT)
  • Empirical multifactor models
  • Forward and futures pricing
  • Option pricing
  • Information and market efficiency
Assessment Elements

Assessment Elements

  • non-blocking Cumulative mark
  • non-blocking Final exam: Group project
Interim Assessment

Interim Assessment

  • 2021/2022 2nd module
    0.5 * Cumulative mark + 0.5 * Final exam: Group project
Bibliography

Bibliography

Recommended Core Bibliography

  • Alexander, G. J., Sharpe, W. F., & Bailey, J. V. (2012). Fundamentals of investments. Slovenia, Europe: Prentice Hall. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.C1BEBDC4

Recommended Additional Bibliography

  • Elton, E. J. (2014). Modern Portfolio Theory and Investment Analysis (Vol. Ninth edition). Hoboken, NJ: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1639379
  • Mishkin, F. S., & Eakins, S. (2016). Financial Markets and Institutions, Global Edition (Vol. Eighth edition, Global edition). Harlow: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1419018
  • Valdez, S., & Molyneux, P. (2015). An Introduction to Global Financial Markets: Vol. 8th ed. Palgrave Macmillan.