1. An assignment, involving the creation and management of a virtual portfolio of shares listed in the Financial Times, will be carried out. All transactions will be recorded and processed using EXCEL. The assignment will be assessed through a written report (1000 words) and weighted 50%. (Learning Outcomes 1, 2, 3, 4)

2. A written examination, in which the students will have access to EXCEL, will be taken at the end of the module. (2 hours) This is also weighted 50%. (Learning Outcomes 1, 2, 3, 4)

Financial Markets - FTSE, shares, options, financial press.
Investment Appraisal - use of EXCEL to evaluate investment decisions (NPV, IRR, Payback, annuities).
Portfolio analysis - statistical analysis (expectation, covariance) involved with portfolio analysis.
Mean-variance portfolio theory, portfolio optimisation.
Modelling and solving investment decisions using LP techniques in EXCEL.
Options and option pricing using the binomial model.
One Fund Theorem and Capital Asset Pricing Model

The core material will be delivered through 24 hours of lectures. In addition you will be assigned to a tutorial group of 20 students and receive a one-hour tutorial each week. Some of these tutorials will be sessions where you work through problems in class and the rest will be computer laboratory sessions where you will use software packages to solve financial optimisation problems.

Throughout the module you will also be working on your share-dealing assignment.

THIS MODULE WILL NORMALLY RUN IN SEMESTER 2

Microsoft EXCEL package

A scientific calculator

This module is only available to students on the Mathematics and Applied Statistics award.

Recommended Reading
How to Read the Financial Pages, M. Brett, Century, 2003, ISBN: 0712662596

Modern Investment Theory, R. Haugen, Prentice-Hall, 5th Edition, 2000, ISBN: 0130191701

Investment Science, Luenberger, Oxford University Press, 1998, ISBN: 0195108094