M.Sc. The Oxford MSc in Financial Economics

Said Business School, University of Oxford, University of Oxford

Application deadline: 31 October 2014, 9 January 2015, 13 March 2015
Tuition fee:
  • £ 33,745 / Year (EEA)
Start date: September  2015
Duration full-time: 9 months
Languages:
  • English
Location:
Delivery mode: On Campus
Educational variant: Full-time
More information: Go to university website

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Description

The UK’s number 1 Masters in Finance programme

The Oxford MSc Financial Economics (MFE) is a full-time nine-month programme that will provide you with outstanding training in the tools of financial economics sought by many financial institutions, companies, and public organisations. It combines a rigorous academic core with tailored practical applications, designed in consultation with leading financial recruiters.

The MFE is run jointly by Saïd Business School’s finance faculty and the University’s Department of Economics. The finance faculty at the Business School is one of the fastest growing and most prestigious in Europe and they work closely alongside the most diverse and well-known groups of economists in the world.

This unique programme is delivered through the Business School which means that, unlike other graduate courses, it features interactive classes, use of case studies, practitioner teaching, and proactive careers support. The programme is currently ranked first in the UK and seventh in the world by the FT ranking for Masters in Finance 2014.

The Oxford MSc Financial Economics programme combines:

  • pre-course training to become familiar with key concepts and techniques.
  • four core courses in asset pricing, economics, corporate finance and financial econometrics. Five electives to choose from a wide range that develop individual skills and specialisations
  • a series of practitioner lectures in finance to provide students with insights into how the financial services sector is being shaped and with the opportunity to network with key recruiters.

Contents

The Oxford MSc Financial Economics (MFE) is run jointly by Saïd Business School’s finance faculty and the University’s Department of Economics. The finance faculty at the Business School is one of the fastest growing and most prestigious in Europe, and works alongside the most diverse and well-known groups of economists in the world. Together they publish prolifically in top journals, speak at academic and practitioner conferences, and advise companies, financial institutions and governments.

Professionalism

The MFE is delivered through Oxford University’s Saïd Business School. This means that, unlike other graduate programmes, theMFE features interactive classes, use of case studies, practitioner teaching, and proactive careers support.

Throughout the programme we stress the links between financial economics theories and key finance activities. Topics are chosen in the economics courses for their relevance to finance. As an example, we list below some of the key finance activities undertaken in financial institutions and, alongside these, their financial economics underpinning and the MFE courses where this underpinning is provided.

The MFE has been designed in close consultation with a panel of advisers from leading financial institutions. This panel has helped ensure that the choice and content of courses match the needs of employers. The panel continues to play an important role on the MFE, providing up-to-date practitioner advice on course content, supplying adjunct faculty and representing major recruiters.

Pre-course training

Once accepted on the programme we will provide you with pre-course reading so that, if you lack a background in finance or economics, you can become familiar with key concepts and techniques that will be introduced early on in the programme. Before the first term you will be required to take pre-course classes in maths (depending on your existing level), in Matlab (a computer language), and in accounting. You will also attend pre-course careers training. A maths workbook has been prepared for students to study over the summer before the programme starts. During the first term there will also be additional mathematics and computing classes should you need further practice and support.

Assessment

Modules are assessed using a combination of examinations and assignments. They vary in the way they are assessed, with core modules placing the emphasis on examinations, and electives stressing written assignments, some of which may be undertaken in teams. Although classroom participation is not graded, many modules give credit for case study write-ups that form the basis of classroom discussions.

Core modules

All students take core modules in corporate finance, asset pricing, financial econometrics, and economics. These modules are all carefully integrated: the economics and econometrics modules apply theories and methodologies to finance, and the finance modules provide the underlying economic principles of financial practice.

Asset pricing

The asset pricing module covers the theory and practice of valuing claims to uncertain cash flows; for example, stocks and stock options, bonds and foreign-exchange instruments. The module covers standard material such as CAPM and the Black-Scholes formula, and some advanced material such as consumption-CAPM and pricing formulas for "exotic options". About half of the module is dedicated to the application of advanced statistical methods to the area of asset pricing and to practical work with real-world data.

Corporate finance

Corporate finance studies the financing, valuation and corporate governance of firms. During this module, you will learn the fundamental principles of financial accounting, the valuation of firms' assets and the determinants of firms' financial structures. You will be taught the key components of firms' financial decisions and the operation of financial markets, including new issues of securities, debt, and dividend policy. You will learn about the relevance of different financial institutions to the financing of firms, the takeover process, corporate restructurings, and financial distress.

Financial econometrics

The module in financial econometrics provides students with a background in the fundamentals of empirical modelling and testing in finance. This will allow you to better understand crucial concepts like risk, evidence, and prediction.

Economics

Microeconomics is the study of how financial and commercial frameworks and conditions impact on individual situations and business units. During this module you will learn to apply the basic tools of market and firm analysis, game theory, incentive theory, and auctions. In addition, the module will provide an introduction to fundamental ideas in macroeconomics, reinforced by lectures from leading policy experts.

Electives

The wide range of electives available enables you to gain a deeper knowledge of areas of special interest. You will be expected to complete five elective modules. Electives on offer are subject to change from year to year depending on demand.

Capital raising and finance

This module, taught by Andreas T. Angelopoulos, examines the role of capital raising for entrepreneurs, investors and companies based on: theory, cases and financial modelling, speakers and a project following the ‘Connect Theory with Practice‘ approach aiming students to acquire not only the required theory of the finance instruments and methods but also to develop their execution and modelling skills for their interviews and career. We will cover:

  1. Finance instruments: Debt (loans and bonds), quasi-equity (shareholder loans, convertible bonds, preference shares), equity (preferred ordinary shares, ordinary shares)

  2. Finance methods: Equity and quasi-equity finance: growth capital, IPO (primary & secondary offer), primary (rights issue and capital increase), secondary (follow on), equity linked (convertible bonds) and debt finance: leverage finance, project finance, infrastructure finance

Cases in finance and investments

The purpose of this module, taught by Andreas T. Angelopoulos, is to provide real cases and modelling experience to students in the finance areas of leverage finance, mergers & acquisitions, private equity finance (LBO and distress), project and infrastructure finance based on:

  • Information memorandum and financial modelling analysis by the Lecturer
  • Case analysis & financial modelling by the students
  • Case presentation and interaction with industry executives
  • Project development by a group of students

Corporate valuation

Managers of firms have many responsibilities. A critical one is to ensure that the firm makes appropriate investment and financial decisions. This module focuses on how to make good decisions. While it will also focus to some extent on the mechanics of corporate valuation, it is more directly a module on how to create (and destroy) corporate value. As such, we are more interested in the decisions you make after you have conducted the valuation analysis.

Who should take this class? Consultants, entrepreneurs, general managers, marketers, investment bankers, and other finance professionals — basically, if you are interested in business, you should take this class.

Entrepreneurial finance

The entrepreneurial finance elective aims to help future executives, facing financing and investment decisions in a broad range of entrepreneurial environments, to make better decisions and achieve better outcomes. The module covers all stages of the financing process from initial financial planning to harvesting value.

While the module will inevitably involve looking at a number of technology driven businesses, the emphasis is on gaining insights into the entrepreneurial financing process rather than looking at the financing of technology businesses per se.

Entrepreneurial environments considered will include not just young, growing, independent businesses but also those around the buy-outs and spin-outs of units from more established businesses, as well as entrepreneurial joint ventures, that are established with a view to their becoming independently viable entrepreneurial businesses in their own right.

One of the eight sessions will also be devoted to looking at the venture capital industry with a view to providing candidates with a broad understanding of current developments in this area and the likely future impact on the range of financing options and alternatives available from these sources going forward.

The module requires candidates to be very comfortable with and confident in using basic financial concepts. It is designed to focus on the numbers and analytic techniques for gaining insight, although continual attention will also be paid to the incentives facing each of the parties in the financing process.

The module will be highly relevant for future executives who may be involved in an entrepreneurial venture at some point in their careers, whether in a turnaround, a management buy-out, a young company or a start-up. It will also be highly applicable for future private equity and venture capital decision makers.

Fixed income and derivatives

This elective will develop the analytical tools necessary to understand and price fixed income and derivatives financial instruments. The properties of these financial instruments will be analysed and related to risk management, portfolio diversification, systemic risk, financial fragility and contagion. Emphasis will be put on applying these techniques on problems emerging in the marketplace.

Topics to be covered include: bond valuation, properties and trading; swaps; risky debt; fixed income and hedging applications; the yield curve; derivatives markets; properties and trading; derivatives pricing and hedging applications; Black-Scholes Model; real options, credit derivatives and securitisation, credit derivatives and financial stability.

Mergers, acquisitions and restructuring

The market for corporate ownership is one of the hallmarks of capitalism. Within that market, vast amounts of corporate wealth have been created – and destroyed. The objective of this module is to understand the market, the institutions that were created in order to execute these complicated transactions, and the strategies that are employed by the major players.

One role of the market is to allocate assets to the owners who can extract the maximum value out of them; bankruptcy is an alternative mechanism. Hence, the two mechanisms are often studied together under the heading of restructuring.

The first four sessions are taught by Oren Sussman and focus on finance. Subsequently, Duncan Angwin will teach four additional sessions that would focus on strategy and organisational behaviour.

Private equity

Throughout the year there are many different seminars, events and conferences involving private equity professionals and those faculty researching in the area. These provide a useful introduction to the sector, and essential background knowledge for students taking the private equity course.

There are three main objectives of the private equity course:

  • to develop an understanding of the roles played by the various participants involved in private equity. The module will consider the attractions of private equity as an investment class. The organisation and incentive structures of private equity funds, and the complex relationship with the companies in which they invest are also analysed.

  • to apply many of the ideas and theories developed in the core finance modules to a particular sector of the financial industry. The private equity sector – involving both venture capital and buy-outs – is a particularly interesting sector to analyse. Private equity is used to finance many companies where the generic problems encountered when financing companies – such as uncertainty or asymmetric information – are especially acute and complex.

  • to critically evaluate the valuation techniques employed in private equity transactions. By their very nature, private equity investments (which lack market valuations provided by public equity markets) are those where valuation is often difficult, being highly sensitive to assumptions and methodology. This module reviews a variety of valuation techniques in the context of real private equity transactions.

Actuarial society exemption

Actuaries provide commercial, financial and prudential advice on the management of assets and liabilities - especially where long term management and planning are critical factors. Actuaries traditionally work in finance, investment and risk management, general insurance, life insurance, pensions and social security.

The Institute of Actuaries and the Faculty of Actuaries are the two chartered professional bodies for UK actuaries, working closely together across the UK as The Actuarial Profession.

The Oxford MFE has been approved by the Actuarial Profession as being of the required standard and leads to blocks of exemptions from the Profession's exams, providing that a suitable overall standard is achieved.

The subjects covered by this agreement are:

  • CT1 – Financial Mathematics
  • CT2 – Finance and Financial Reporting
  • CT3 – Probability and Mathematical Statistics
  • CT7 – Economics
  • CT8 – Financial Economics
  • ST0 – Alternative study Specialist Technical

Professional partnerships

Chartered Financial Analyst

The CFA (Chartered Financial Analyst) Institute is a global organisation which administers the CFA qualification, a rigorous three-tiered professional qualification open to those working within the finance sector which is highly regarded by recruiters.

Saïd Business School is the founder member of the CFA Educational Partnership programme, which officially recognises that 70 per cent of the CFA qualification's required body of knowledge is embedded within the MFE curriculum.

A large proportion of MFE students are registered with the CFA Institute. This partnership gives them the opportunity to:

  • Access CFA Institute curriculum materials.
  • Access information on the nature of CFA examinations, including printed copies of sample examinations.
  • Attend professional development events organised by the Institute.
  • The partnership also offers a scholarship to five MFE students. Under each scholarship, CFA registration fees are waived and the enrolment fee is lowered.

The MFE and the CFA do not provide exemptions from each other's exams. MFE students receive tailored training to help them prepare specifically for the CFA exams.

Research track

Further research in financial economics

For those interested in pursuing doctoral research in financial economics, it is possible to use the MSc Financial Economics coursework as preparation. There are excellent doctoral facilities in finance at Oxford University in the Business School, Economics and Mathematics Departments. Please go to the Oxford Financial Research Centre website for more information.

Prospective doctoral students will be required to write a research-oriented project report in the third term and will also be required to take certain advanced electives. Admittance to a doctoral programme is then subject to excellent performance on the MFE, possibly some additional coursework, the development of a promising research programme, and the identification of an appropriate supervisor.

Requirements

An undergraduate degree, equivalent to:

  • 1st or 2.1
  • or GPA of 3.5+ (USA)

As evidence, we ask applicants to upload their University degree academic transcripts/mark-sheets to the online application form. These must outline the subjects studied or grades obtained from each academic year.

GMAT score OR GRE score

We recommend that the quantitative scores are in the 90th percentile, the verbal scores are in the 80th percentile and the analytical writing score is at least 5.

A. Please contact GMAC/ GRE directly to arrange to take the test: www.gmac.com/ www.gre.org

B. All sections of the GMAT/ GRE must be taken in order to be considered valid

C. Official online scores must be accessible by our admissions department for your application to be considered complete. For GMAC to release your official scores to the Saïd Business School, please give your test centre the following code: Q0G-4B-59. For your official GRE scores to be released, please give your test taking centre the following code: 0807

D. GMAT/ GRE scores are not valid if they are older than five years on the application deadline date.

References

Two academic or professional references submitted via the online application form. If you are in the process of completing a degree programme, one reference should be from your current institution. Once referee details are input onto the application form an email is generated and emailed to the referee, with details for completing the online reference.

  • Written work

How do you hope to see your career developing over the next five years? How will the MSc in Financial Economics assist you in the development of these ambitions? Maximum of 500 words

  • A Test of English as a Foreign Language (TOEFL) or International English Language Test Scheme (IELTS) must be taken, and all minimum scores met (unless eligible for a waiver) if either:

a. Your first language is not English OR

b. You are not from a majority English speaking country, as defined by the UK Visas and Immigration office, below.*

*List of majority English speaking countries as defined by the UK Visas and Immigration office

Australia, New Zealand, USA, Canada, UK, Ireland, Antigua and Barbuda, The Bahamas, Barbados, Dominica, Grenada, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago, Belize, Guyana

English Language Requirements

IELTS band: 7.5
TOEFL iBT® test: 110

IMPORTANT NOTE: Since April 2014 the ETS tests (including TOEFL and TOEIC) are no longer accepted for Tier 4 visa applications to the United Kingdom. The university might still accept these tests to admit you to the university, but if you require a Tier 4 visa to enter the UK and begin your degree programme, these tests will not be sufficient to obtain your Visa.

The IELTS test is most widely accepted by universities and is also accepted for Tier 4 visas to the UK- learn more.

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