Money, Banking and Finance – (M.Sc.)

Contents

The programme is taught over three terms, with breaks at Christmas and Easter. As illustrated in the diagram, the programme consists of nine modules, including a dissertation: seven are compulsory, and for the remaining two modules you can choose from a range of options.

Term 1: October to December

All students take four core modules:

Topics in EconomicsFocusing on theoretical and analytical techniques in microeconomics and macroeconomics, this module is a foundation for more advanced and specialist material in subsequent modules. The microeconomic element focuses on determinants of strategic choice by firms. The macroeconomic element examines the behaviour of the economy and highlights key macroeconomic policy issues facing economic agents.

Applied EconometricsThis module provides an introduction to statistical techniques and their applications in the context of international business and money, banking and finance problems. Designed to familiarise students with standard statistical packages, it also looks at the principles of constructing econometric and non-econometric models and how these models can be used in various practical contexts. Relevant research outcomes utilising these techniques will be highlighted.

Foundations of FinanceThis module covers investment appraisal techniques, stock and bond valuation, portfolio theory, capital structure, forward contracts, futures, options and corporate strategy.

Financial Markets and SecuritiesThis module provides students with the necessary theoretical and technical skills to value and use various financial instruments such as forwards, futures, options and swaps.

Term 2: January to April

You take a further two core modules, plus two optional modules, either with an economics or a finance focus.

Towards the end of the term, a Dissertation Seminar provides training in the research techniques and analytical tools you will need for your dissertation.

International Banking & Risk ManagementThis module examines the economics of financial intermediation and disintermediation, with some emphasis on the UK as a major international financial centre. Covering commercial and investment banking, the module examines practical issues of risk management by intermediaries as well as the potential risks involved in the more recent trend towards financial disintermediation. Regulatory issues are addressed, with attention paid to both ‘on’ and ‘off’ balance sheet positions.

Economics for Money, Banking & FinanceThe first part of this module looks at the advanced microeconomic theory of banking, including topics such as competition in banking, risk analysis and credit market imperfections. The second part focuses on the macroeconomics of money and banking, including policy debates about monetary and fiscal stabilisation, the critique of policy formulation, time inconsistency and the rationale for an independent central bank.

Option choices
You also take two further modules, chosen from the following options:

* Advanced Corporate FinanceThis module extends the valuation of the corporate assets and liabilities to cases in which they contain embedded options. Issues addressed include the valuation of hedge instruments, the valuation of convertible securities, capital structure, mergers and acquisitions and the ‘real options’ approach to investment appraisal.


* Advanced Investment FinanceThis module focuses on modern portfolio strategies of analysis and the returns from factor models.


* Financial EconometricsThis module examines the statistical techniques employed in financial time series. It explains how econometric methods can be used to learn about the future behaviour of the prices of financial assets by using the information in the history of asset prices and in the prices of derivative securities.


* Financial Statement AnalysisThis module familiarises students with techniques for evaluating corporate performance and valuing businesses on the basis of financial statement information. Topics covered include financial ratios, financial distress, and the theory and practice of accounting-based valuation of businesses.


* Behavioural FinanceThis course extends the analytical tools used for evaluating strategic and investment decisions learnt in other modules by deviating from the paradigm of rational decision making. The module focuses on the implications of investor behaviour and capital market imperfections (such as limits to arbitrage) for investment management. The concepts of this module are a foundation for value investing, arbitrage, asset management and opportunistic corporate finance. The module uses insights from psychology and behavioural finance to complement traditional market frictions and explain the behaviour of capital markets.


* International Money and FinanceBeginning with the basic international parity relationships, this module examines the nature of business exposure to foreign exchange risk and the techniques available for hedging these risks. In addition to reviewing forward and futures contracts, several sessions are devoted to the theory and application of options contracts in the context of forex risk hedging.


* Islamic BankingThis course aims to develop an understanding of how the Islamic banks operate and define its underlying products. The course's objectives are to provide a brief introduction to the area of Islamic banking; study the theoretical foundation for Islamic products with emphasis on concepts such as risk sharing and estimating the time value of money in the absence of interest rates; and to develop the necessary tools for carrying out applied analysis in the area.



The optional modules may vary according to the availability of teaching staff and the demand for the modules.

Term 3: May to September

DissertationThe final element of the MSc is the dissertation, a substantial piece of independent work conducted over the summer months through to September. The dissertation gives you the opportunity to apply research techniques and relevant economic theory to a research topic.