INTRODUCTION
This course aims to develop students understanding of the basic principles of financial markets and provides an introduction how assets are valued and traded in those markets. The course considers stock market prices and returns; stock market risk and the influence of risk on the pricing of shares. It also considers exchange rates, interest rates and the pricing of bonds; and the characteristics and pricing of financial futures and options. But the most important contribution of this course to your future career is how to use the latest academic insights to better assess risks and returns, and the trade off between the two in your future decision making.
The course aims to develop a student’s understanding of the basic principles of finance. It builds on the introduction to finance provided in the Foundations of Business course. The course has a quantitative slant, and is designed to give a theoretical introduction to financial markets.
The course looks at the way assets are valued in financial markets. It considers interest rates and the pricing of fixed-income bonds; stock market prices and returns; stock market risk and the influence of risk on the pricing of shares; and the characteristics and pricing of financial futures and options.
Learning Outcomes
- Describe the main financial assets and how they may be valued
- Discuss critically the contribution of finance theory to financial practice
- Understand and explain stock market prices and returns; stock market risk and the influence of risk on the pricing of shares
- Understand and explain the effects on financial markets of exchange rates, interest rates and the pricing of bonds
- Understand and explain the characteristics and pricing of financial futures and options
Foreign Exchange, the Money Market, the Bond and Stock Markets.