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2013/14 Undergraduate Module Catalogue
LUBS3110 Capital Market Theory
10 creditsClass Size: 150
Module manager: Dr Moshfique Uddin
Email: .
Taught: Semester 2 (Jan to Jun) View Timetable
Year running 2013/14
Pre-requisites
LUBS2200 | Business Finance 2 |
This module is not approved as an Elective
Objectives
On completion of this module students will be able to:- understand the fundamentals of stock exchange investment, specifically the theoretical principles underlying stock exchange investment, concentrating on the two main characteristics of a security, risk and return;
- compare and value securities such as equities, bonds, options and futures;
- understand the principles underlying the design of an investment portfolio;
- evaluate alternative investment strategies, both those advocated in theory and those used in practice in the stock market.
Syllabus
- Introduction to the UK Stock Exchange: how securities are traded, the nature of market making
- Overseas stock exchanges
- Introduction to ordinary shares, concepts of risk and return, two item portfolio theory
- Capital asset pricing model (CAPM), its assumption and implications, single index models, concept of diagonality
- Efficient markets hypothesis: its meaning, empirical tests and its implications for investors
- Shares: fundamental and technical analysis
- Bonds, their characteristics, valuation and the term structure of interest rates
- Options: their characteristics, the binomial pricing model and the Black-Scholes model
- Warrants and convertibles
- The valuation and use of financial futures
Teaching methods
Delivery type | Number | Length hours | Student hours |
Workshop | 10 | 2.00 | 20.00 |
Private study hours | 80.00 | ||
Total Contact hours | 20.00 | ||
Total hours (100hr per 10 credits) | 100.00 |
Private study
For each 10 credits of study taken, the expectation is that the normal study time (including attendance at lectures and tutorials, self-study and revision) is 100 hours.Opportunities for Formative Feedback
Students will receive self assessment questions with model answers, notes on answers and guidance on how to answer particular types of question.Methods of assessment
Exams
Exam type | Exam duration | % of formal assessment |
Standard exam (closed essays, MCQs etc) | 2 hr | 100.00 |
Total percentage (Assessment Exams) | 100.00 |
Normally resits will be assessed by the same methodology as the first attempt, unless otherwise stated
Reading list
The reading list is available from the Library websiteLast updated: 31/03/2014
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