Business and management studies

Principles of Finance

Module code: N1560
Level 4
15 credits in autumn teaching
Teaching method: Lecture, Seminar
Assessment modes: Unseen examination

You are introduced to financial markets, instruments and concepts. 

You are given an overview of the roles of different financial institutions, and the products they most commonly provide and trade.

During the module you discuss historical events in the financial markets and how this illustrates their importance in the wider economy. 

You focus on finance concepts related to equity and bond markets, beginning with:

  • interest rates
  • returns
  • time value of money
  • discounting
  • present value.

Other topics include:

  • LIBID and LIBOR
  • cost of capital
  • bid ask spreads
  • no-arbitrage relationships, for example between stocks and futures or forwards.

You are also given an insight into the idea of hedging with derivative products.

Module learning outcomes

  • Have demonstrated knowledge of the core principles of finance, and the most common financial institutions, products and markets.
  • Analyse a finance problem or issue using an appropriate theoretical framework and present ideas, concepts and information using means appropriate to the audience and the problem at issue.
  • Demonstrate an understanding of appropriate concepts in finance that may be of wider use in a decision-making context (e.g. discounting).
  • Describe the fundamental concepts related to interest rate markets, such as yield curve behavior, duration and convexity.