Class contact of 72 hours consisting of 24 hours (1 per week) of lectures and 48 hours practical/tutorial (2 per week) of max size of 20.

Lecture material will demonstrate and explain the mathematical concepts and techniques relevant to the module content. Lab based tutorials will reinforce the lecture material and provide an opportunity to analyse data, practice techniques and learn to apply appropriate computer software and interpret its output.

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

Recommended Reading:

Les Oakshott, Essential Quantitative Methods for Business Management and Finance, 4th edition, Palgrave Macmillan (2009), ISBN: 978-0230218185
Bancroft & O'Sullivan, Quantitative Methods for Accounting and Business Studies, McGraw-Hill (1993), ISBN: 978-0077077310
Gaynor & Kirkpatrick, Introduction to Time-series Modeling and Forecasting in Business & Economics, McGraw-Hill, (1994), ISBN: 0071133348
How to Read the Financial Pages, M. Brett, Century, 2003, ISBN: 0712662596
Modern Investment Theory, R. Haugen, Prentice-Hall, 5th Edition, 2000, ISBN: 0130191701

1.An assignment, involving the creation and management of a virtual portfolio of shares listed in the Financial Times. All transactions will be recorded and processed using EXCEL. The assignment will be assessed through a written report (around 3000 words) and weighted 40%. (Learning Outcomes 5, 6, 7, 8).

2.Class test to consist of two tests with access to a computer, each of 1.5 hours duration and equally weighted.
Class test 1 - Learning outcomes 1, 2, 3 and 4. Class test 2 - Learning outcomes 1, 5, 6 and 7.

The class test will be the final assessment.

None.

Decision theory analysis using decision trees. Maximin, maximax and minimax decision criterion. Utility functions and types of risk-taker. The value of perfect information.
Decomposition methods for time-related data. Identification of trend, seasonal components for additive and multiplicative models, seasonal indices, forecasts. Use of simple exponential smoothing.
Nature and cost aspects of stock control. Economic order quantity, lead times, re-order levels, discounts and stockouts. Understanding the role of uncertainty and safety stock.
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

N/A