MSc Finance and Financial Law (Distance Learning)

In this module you will study the main issues in modern corporate finance. The subject ‘corporate finance’ is a well-established discipline, which is concerned with corporations large enough to have issued shares that are ‘quoted’ on a stock market. We must, though, first clarify what we mean by the main issues, for the issues that are important to one person may be viewed as less important by others.

Learning outcomes

When you have completed your study of this module you will be able to:

• describe modern principles of corporate finance and evaluate their validity
• rationalise corporate finance decisions in the light of agency problems and conflict of interest among corporations' stakeholders
• analyse firms' investment decisions
• discuss firms' choice of capital structure and its implications for the value of the firm
• examine and discuss the key issues related to dividend policy and their implications for the value of the firm
• critically assess the reasons behind mergers and acquisitions and their welfare implications.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Hillier D, S Ross, R Westerfield, J Jaffe, & B Jordan (2021) Corporate Finance. 4th Edition. McGraw-Hill Education.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Excel worksheets: Worksheet exercises are available to download on the VLE.
  Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Perspectives on Corporate Finance

• 1.1 Introduction
• 1.2 Core Theories of Corporate Finance
• 1.3 Key Questions in Corporate Finance
• 1.4 The Objective of the Firm
• 1.5 Agency Problems
• 1.6 Conflict between Shareholders and Bondholders
• 1.7 Conclusion

Unit 2 Net Present Value and Capital Budgeting Decisions

• 2.1 Introduction to Capital Budgeting Decisions
• 2.2 Investment Principles and Net Present Value
• 2.3 Capital Budgeting Decisions
• 2.4 Analysing a Project – A Mini Case
• 2.5 Sensitivity and Scenario Analysis

Unit 3 Return, Risk, Portfolio and Asset Pricing Models

• 3.1 Introduction
• 3.2 Expected Return and Risk
• 3.3 How is the Equilibrium Return on Risky Assets Determined? – The Capital Asset Pricing Model
• 3.4 A More General Model: the Arbitrage Pricing Theory (APT)
• 3.5 Conclusion

Unit 4 Issues in Modern Finance: the CAPM, Efficient Market Hypothesis and Behaviour Finance

• 4.1 Introduction
• 4.2 The Use of CAPM for Calculating the Cost of Capital for Risky Projects
• 4.3 Efficient Capital Markets
• 4.4 Weak, Semi-strong and Strong Forms of Efficiency
• 4.5 Anomalies – Are they Meant to be Extinct?
• 4.6 Implications for Corporate Financing Decisions
• 4.7 Conclusion

Unit 5 Dividend Policy

• 5.1 Introduction
• 5.2 Empirical Evidence on Dividend Policy
• 5.3 The Irrelevance of Dividend Policy
• 5.4 Taxes Can Make Dividend Policy Matter
• 5.5 Asymmetric Information and Signalling
• 5.6 Dividend Policy and Agency Costs
• 5.7 Is There an Optimal Dividend Policy?

Unit 6 Capital Structure I

• 6.1 Introduction – How Much Debt Should the Firm Issue?
• 6.2 The Debt-Equity Irrelevance Theorem
• 6.3 Corporate and Personal Taxes
• 6.4 Effects of Bankruptcy Costs
• 6.5 Implications and Limitations of the Trade-off Theory of Optimal Capital Structure
• 6.6 Conclusion

Unit 7 Capital Structure II: Information Asymmetries and Agency Costs

• 7.1 Introduction
• 7.2 Asymmetric Information Explanations of Capital Structure
• 7.3 Minimising the Agency Costs of Equity and Debt
• 7.4 Conclusion

Unit 8 Mergers

• 8.1 Introduction
• 8.2 Merger Gains and the Sources of Gain
• 8.3 Rationale for Mergres to Take Place
• 8.4 Forms of Takeover
• 8.5 Some Stylised Facts about Merger Activity
• 8.6 Review of the Unit's Questions

Module samples

• M421 Module introduction (PDF)
• M421 Specimen examination (PDF)
• M421 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

The module aims to examine and critically discuss the fundamental concepts of financial law in the light of market developments in national and international financial markets. It builds upon the introductory module, Introduction to Law and to Finance, and complements the more specialist modules, Legal Aspects of International Finance, Legal Aspects of Corporate Finance and Regulation of International Capital Markets.

Learning outcomes

When you have completed your study of this module and its core readings, you will be able to:

• outline and discuss the importance of financial law for the creation and development of strong financial markets
• analyse the institutional framework that is necessary for the provision of credit and the operation of financial markets
• explain and critically discuss the basic legal components of the financial system
• examine and discuss the key legal problems that relate to the provision of finance and the ways in which financial institutions address such problems
• critically discuss the legal principles and rules applicable to bank deposits and the relationship between the banker and the customer
• discuss and analyse the basic legal principles underpinning commercial and international banking transactions
• identify and critically evaluate the legal risks involved in the process of agreeing and documenting the most basic financial agreement
• analyse and discuss the basic legal components of the payment systems of key jurisdictions of the world
• critically evaluate the nature, scope, economic function of security in the provision of finance
• identify and critically evaluate the systemic risk in the financial market encountered by the financial authority.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Ellinger EP, E Lomnicka & CVM Hare (2011) Ellinger's Modern Banking Law. 5th Edition. Oxford, Oxford University Press.
  McKendrick E (Ed.) (2016) Goode on Commercial Law. 5th Edition. Penguin.
• Readings:Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment:You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction to Financial Law

• 1.1 Introduction
• 1.2 The Banking System
• 1.3 Capital Markets
• 1.4 The Importance of Law for Financial Markets
• 1.5 The Legal Preconditions for Efficient Financial Markets
• 1.6 The Institutional Preconditions for Efficient Financial Markets
• 1.7 Conclusion

Unit 2 The Needs of Finance and the Character of English Financial Law

• 2.1 Introduction
• 2.2 The Needs of Finance
• 2.3 The Nature of English Financial Law
• 2.4 The Principal Sources of English Financial Law
• 2.5 Conclusions

Unit 3 Bank Deposits and Accounts

• 3.1 Introduction
• 3.2 Bank Deposits and the Financial System
• 3.3 The Banker–Customer Relationship
• 3.4 The Legal Properties of Bank Accounts
• 3.5 Confidentiality and Data Protection
• 3.6 The Law of Electronic Banking
• 3.7 Conclusion

Unit 4 The Law Relating to Money and Payments

• 4.1 Introduction to Money and Payments
• 4.2 The Legal Concept of Money
• 4.3 The Legal Concept of Payment
• 4.4 Payments by Bank Transfers
• 4.5 Payment Systems – Clearing and Settlement
• 4.6 Conclusion

Unit 5 The Law Relating to Loans and Credit

• 5.1 Introduction to Lending and Bank-Based Finance
• 5.2 Forms of Credit
• 5.3 The Loan Agreement and Principal Questions of Law
• 5.4 The Law Relating to Consumer Lending
• 5.5 Conclusion

Unit 6 The Law of Secured Finance

• 6.1 Introduction to the Mechanisms of Credit Enhancement
• 6.2 The Economic Rationale of Secured Finance
• 6.3 Forms of Security – Pledge, Mortgage and Charge
• 6.4 Issues of Priority and Enforcement
• 6.5 Key Considerations
• 6.6 Conclusion

Unit 7 The Law Relating to the Control of Financial Crisis

• 7.1 Introduction to the 2008–2009 Financial Crisis
• 7.2 The Northern Rock Banking Crisis
• 7.3 The Banking Act 2009
• 7.4 The Definition of a Failing Bank
• 7.5 Conclusion

Unit 8 Questions of Liability

• 8.1 Introduction to the Concept of Liability
• 8.2 Doctrinal Bases of Liability
• 8.3 Advice
• 8.4 Lender Liability
• 8.5 Conclusion

Module samples

• M440 Module introduction (PDF)
• M440 Specimen examination (PDF)
• M440 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

This module, Introduction to Law and to Finance, is designed to introduce you to the basic concepts of finance and law. It does not require previous study of the two subjects although it will add to your knowledge if you have studied an undergraduate module in either of two disciplines. This module intends to be an entry point in the world of finance and the law upon which finance is based. It is designed to enable you to learn some of the basic principles of law and of financial techniques as foundations for the detailed study of finance and financial law that you will study in subsequent modules of the MSc degree.

This module aims to go further than presenting the basics of law and of financial techniques, for the thrust of the academic programme on Finance and Financial Law is the close relationship between law and financial economics. This module is designed to emphasise this relationship and draw your attention to the fact that legal rules and principles play an important role in the structure and operations of financial markets.

Our intention is that after successfully completing the module, students from different backgrounds will understand the basic principles of law and how they interact with finance. We will try to remind you of that close relationship and enhance your understanding of law by way of real examples as to how law affects the operation of financial markets.

Learning outcomes

When you have completed the study of this module and its readings you will be able to:

• demonstrate the importance of law as a component of vibrant and successful markets, particularly financial markets
• analyse the importance of the law of contracts and the law of non-contractual liability for the smooth functioning of financial markets
• discuss the basic principles, sources and methods of law
• identify and discuss the points of contact between law and market behaviour of investors, banks, corporations and other players in national and international financial markets
• use basic mathematical formulas that are used in financial decisions
• discuss concepts of returns, risk, and time, which underpin rational financial decisions and interact to determine prices of financial securities
• explain how returns, risk, and time are represented by mathematical formulas used in finance
• discuss how concepts of probability relate to risk and how they are represented by statistical formulas used in finance.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: 
  • Barker D (2014) Law Made Simple, 13th Edition, Routledge.
  • Holland J & J Webb (2016) Learning Legal Rules: A Student's Guide to Legal Method and Reasoning, 9th Edition, Oxford University Press.
  • Partington M (2018) Introduction to the English Legal System 2018–2019, 13th Edition, Oxford University Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23
 

Study calendars are subject to change.

Module overview

Part 1: Introduction to Law

Unit 1 Introduction to Law

• 1.1 The Functions of Law
• 1.2 Subject Areas of Law
• 1.3 Jurisdictions of the World and 'legal families'
• 1.4 Legal Method and Legal Reasoning
• 1.5 The Relationship between Law and Equity
• 1.6 Finding Law
• 1.7 Summary

Unit 2 Sources of Law and How to Use Them

• 2.1 Introduction to the Sources of English Law
• 2.2 Judicial Decisions as Sources of Law: Precedent and the Court System
• 2.3 Reading Cases
• 2.4 Statutory Law and Statutory Interpretation
• 2.5 European Union Law as a Source of English Financial Law
• 2.6 Summary

Unit 3 Introduction to Contract Law

• 3.1 Unit Introduction
• 3.2 Financial Markets and the Law of Contracts
• 3.3 Freedom of Contract
• 3.4 Essentials of a Valid Contract
• 3.5 Offer and Acceptance
• 3.6 Consideration
• 3.7 Formalities
• 3.8 Terms and Conditions

Unit 4 Introduction to Property Law

• 4.1 Unit Introduction
• 4.2 Financial Markets, Property Rights and the Law of Property
• 4.3 Property Rights and the Fundamentals of Property Law
• 4.4 The Transfer of Property Rights and Obligations
• 4.5 Introduction to the Concept of Trust
• 4.6 Equity and Equitable Remedies
• 4.7 Agency and Fiduciary Duties

Unit 5 Introduction to Tort Law

• 5.1 Unit Introduction
• 5.2 What is a Tort?
• 5.3 The Function of the Law of Torts and Financial Markets
• 5.4 Negligence
• 5.5 Economic Loss
• 5.6 Misrepresentation
• 5.7 Summary and Conclusion

Part 2: Introduction to Finance

Unit 6 Returns and Time – the Price of Time

• 6.1 Introduction
• 6.2 Returns, Time and Risk
• 6.3 Returns and the Price of Financial Securities
• 6.4 Compound Interest
• 6.5 Discounting and the Yield to Maturity
• 6.6 Returns on Equities
• 6.7 Crunching the Numbers
• 6.8 Conclusion

Unit 7 Returns and Risk – the Price of Risk

• 7.1 A Price for Risk
• 7.2 Risk of What?
• 7.3 Probability Distributions – the Basis for Measuring Risk
• 7.4 The Real World – Volatility
• 7.5 Downside Risk
• 7.6 Some Criticisms of Risk Measures Based on Standard Deviations
• 7.7 Risk and Returns – the Equity Premium
• 7.8 Conclusion

Unit 8 Interpreting Financial Sector Data

• 8.1 Introduction – Cause and Effect
• 8.2 Is there a Correlation of Bank Rate and Bond Yield?
• 8.3 Do Countries' Legal Systems Affect the Development of their Financial Systems?
• 8.4 Understanding the Use of Regression Analysis
• 8.5 Interpreting the Regression Results of La Porta, Lopez-de-Silanes, Shleifer and Vishny
• 8.6 Conclusion

Module samples

• M438 Module Introduction (PDF)
• M438 Specimen Examination (PDF)
• M438 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

Welcome to this module on Bank Financial Management. At the outset, it is worth noting that this module has a somewhat more applied feel to it than many other modules in the Master’s and Postgraduate Diploma programme, focusing as it does on the microeconomic problems of financial management of banking firms. This does not mean, however, that the module is devoid of theoretical interest.

Learning outcomes

This module examines the role and importance of bank financial management to the modern bank. It teaches the basic models of financial management taught by University Economics Departments and Business Schools, which were constructed from the experience of mature capitalist economies. The module discusses the various trends shaping banking markets, such as institutionalisation, securitisation, globalisation and concentration.

When you have completed this module, you will be able to:

• discuss trends affecting the whole financial services industry
• assess the implications of change for bank risk management
• outline how the behaviour of banks has been modelled
• identify the risks facing bank financial managers
• explain the need to adapt risk management procedures to an increasingly international financial system
• discuss how interest-rate risk can be managed using hedging activities through the use of financial derivatives and securitization
• explain why funding mix and costs are important to bank management when making loan and investment decisions
• discuss how credit risk and default premiums are assessed and monitored
• analyse the relationship between bank performance and capital adequacy

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Koch TW & SS MacDonald (2015) Bank Management, 8^th Edition, Cengage Learning.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Banking Innovations and Risk

• 1.1 Introduction
• 1.2 Bank Management and Bank Financial Management
• 1.3' The good old days': A Simple Balance Sheet View of Banking
• 1.4 The Transformation of Banking – 1970 to 2007
• 1.5 Financial Innovation
• 1.6 Implications of Banking Innovations for Bank Financial Management
• 1.7 An Assessment of Credit Risk Transfer
• 1.8 Conclusion

Unit 2 Bank Accounts: A Useful Tool if Handled with Care

• 2.1 Introduction
• 2.2 The Bank's Balance Sheet: An Introduction
• 2.3 The Bank's Income Statement
• 2.4 Fair Value and Mark-to-Market Accounting: A Hot Topic with Real Potential Effects
• 2.5 Conclusion

Unit 3 Bank Valuation

• 3.1 Introduction
• 3.2 The Functions of Bank Financial Managers
• 3.3 The Risks Facing Bank Financial Managers
• 3.4 The Value of the Banking Firm
• 3.5 The Difference Between Market and Book Value
• 3.6 Performance Analysis Using Financial Ratios
• 3.7 Conclusion

Unit 4 Bank Risk Management – Liquidity Management

• 4.1 Introduction
• 4.2 Bank Risk Management
• 4.3 Concepts of Liquidity and Solvency
• 4.4 Sources of Liquidity
• 4.5 Measuring Banks' Liquidity
• 4.6 Practical Liquidity Management
• 4.7 Payments System Risk and its Potential Impact on Bank Liquidity
• 4.8 Conclusion

Unit 5 Bank Risk Management – Interest Rate Risk Management

• 5.1 Introduction
• 5.2 Interest-Rate Risk Management
• 5.3 GAP Analysis
• 5.4 Duration Analysis
• 5.5 Hedging Interest Rate Risk Off Balance Sheet
• 5.6 Conclusion

Unit 6 Cost of Funds and the Funding of Operations

• 6.1 Introduction
• 6.2 Measuring the Cost of Funds
• 6.3 A Note on the Cost of Capital
• 6.4 Using Cost of Funds Measures
• 6.5 Risks Associated with Raising Funds
• 6.6 Conclusion

Unit 7 Bank Risk Management – Credit Risk

• 7.1 Introduction
• 7.2 Credit Risk
• 7.3 Credit Risk and Default Premiums
• 7.4 Loan Administration: General Procedure
• 7.5 Credit Assessment
• 7.6 Loan Pricing
• 7.7 Problem Loans
• 7.8 Conclusion

Unit 8 Capital Management

• 8.1 Introduction
• 8.2 Basel Accords' Rules and Categories of Bank Capital
• 8.3 Conclusion
• Appendix 8.1 ‘Report for G7 Summit’

Module samples

• M422 Module Introduction (PDF)
• M422 Specimen Examination (PDF)
• M422 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

It is widely recognised by academic economists and policymakers that developed and efficient banking and capital markets are an important prerequisite for economic growth. However, it is also recognised that banking and financial crises can cause abrupt slowdowns or reversals of growth. The drive to understand these phenomena has generated a large body of research, leading to new theories and empirical studies of key features of banking and capital markets. This literature provides the underpinning for the subject material of this module.

Learning outcomes

When you have completed your study of this module, you will be able to:

• explain the functions of financial intermediaries, and evaluate the strengths and weaknesses of bank-oriented and market-oriented financial systems.
• critically evaluate theories of the banking firm which focus on the role of the bank as a provider of liquidity insurance for depositors, and as a delegated monitor of borrowers.
• explain the methods available to a bank to manage credit risk, interest rate risk, market risk and liquidity risk.
• explain why credit markets may fail to clear, and critically evaluate theories of credit rationing and overlending.
• discuss the methods used by shadow banking institutions to raise finance, and the risks to financial stability presented by shadow banking.
• critically evaluate methods for measuring the efficiency of banks, and the intensity of competition in deposits and loans markets.
• explain how a loss of depositor confidence, and asset price bubbles, can trigger banking and financial crises.
• critically evaluate the effectiveness of regulatory arrangements for the banking industry in promoting financial stability.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Matthews K and J Thompson (2014) The Economics of Banking. 3rd Edition. Chichester UK: John Wiley & Sons.
  Freixas X and J-C Rochet (2008) Microeconomics of Banking. 2nd Edition. Cambridge MA: The MIT Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Banks and Financial Markets

• 1.1 Introduction
• 1.2 Financial Intermediaries, Financial Markets, and the Flow of Funds
• 1.3 The Financial System and the Flow of Funds
• 1.4 Comparative Financial Systems
• 1.5 Law, Politics and Financial Systems
• 1.6 Bank-oriented versus Market-oriented Financial Systems
• 1.7 Conclusion

Unit 2 Financial Intermediation

• 2.1 Introduction
• 2.2 Principles of Financial Intermediation
• 2.3 Financial Intermediation and Transaction Costs
• 2.4 The Financial Intermediary as a Means of Alleviating Asymmetric Information Problems
• 2.5 The Financial Intermediary as a Liquidity Insurer for Depositors
• 2.6 Conclusion

Unit 3 Risk Management

• 3.1 Introduction
• 3.2 Interest Rate Risk
• 3.3 Market Risk
• 3.4 Credit Risk
• 3.5 Liquidity Risk
• 3.6 Conclusion

Unit 4 Credit Rationing

• 4.1 Introduction
• 4.2 Financial Repression
• 4.3 Credit Rationing due to Adverse Selection: The Stiglitz–Weiss Model
• 4.4 Over-lending
• 4.5 Credit Rationing due to Moral Hazard
• 4.6 Conclusion

Unit 5 Shadow Banking and Securitisation

• 5.1 Introduction
• 5.2 Shadow Banking: Entity-based Classification
• 5.3 Shadow Banking: Activity-based Classification
• 5.4 Traditional Banking and Shadow Banking
• 5.5 The Role of Shadow Banking in the Global Financial Crisis 2007–09
• 5.6 Regulation of Shadow Banking
• 5.7 Conclusion

Unit 6 Competition and Efficiency in Banking Markets

• 6.1 Introduction
• 6.2 The Theory of the Banking Firm
• 6.3 Measures of Competition in Banking
• 6.4 The Structure-Conduct-Performance Paradigm
• 6.5 The New Empirical Industrial Organisation
• 6.6 Measures of Banking Efficiency
• 6.7 Mergers and Acquisitions in Banking
• 6.8 Conclusion

Unit 7 Banking and Financial Crises

• 7.1 Introduction
• 7.2 Bank Runs in the Diamond and Dybvig Model
• 7.3 The Asian Financial Crisis 1997–98
• 7.4 Risk-shifting and Asset Price Bubbles
• 7.5 The Global Financial Crisis 2007–09
• 7.6 Deposit Insurance and Moral Hazard
• 7.7 Conclusion

Unit 8 Bank Regulation

• 8.1 Introduction
• 8.2 Systemic Risk
• 8.3 Lender of Last Resort
• 8.4 Deposit Insurance
• 8.5 Risk-adjusted Capital Adequacy Requirements
• 8.6 Stress Testing
• 8.7 Conclusion

Module samples

• M426 Module introduction (PDF)
• M426 Specimen examination (PDF)
• M426 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

This module, Corporate Governance, is specially designed for the postgraduate study of such areas as management, finance, financial law, corporate law, economics and related subjects. The module is designed to increase the depth of your understanding of corporate governance issues. As corporate governance is a multi-disciplinary subject – covering such topics as law, politics, management, finance, and economics – you will find that the module will add to previous study of any of these disciplines. A previous knowledge of corporate governance is not required.

Upon successful completion of this module, it is hoped that students with a variety of backgrounds will understand the key elements of corporate governance and its importance to the international economy. In order to achieve this, a strong emphasis is placed on the relationship between theoretical concepts and real world issues. It is therefore hoped that the module can make a real contribution to your in-depth understanding of the relevant corporate governance issues.

Learning outcomes

When you have completed your study of this module you will be able to:

• outline and discuss the key legal, political and economic features of the major corporate governance systems found around the world
• analyse how corporate governance systems influence performance, including both the performance of individual firms and the allocation of capital within a country
• discuss the evolution of diverse ownership and governance structures across different economies
• evaluate theories of the firm, and explain how they are relevant to the diverse range of ownership structures that exist in reality
• address such practical questions, as how should the board of directors and executive teams be composed; how should executives and board of directors be remunerated given the legal, political and economic framework in the country; how do CEOs decide about the mix of debt and equity finance and how does the mix affect their discretion and control over cash flow?
• explain why the quality of corporate governance is relevant to capital formation
• describe why systematic failure of corporate governance can lead to failure of confidence that could spread from individual firms to entire markets or economies
• discuss the role of corporate governance codes and evaluate their usefulness in achieving better corporate governance practices.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Monks RAG & N Minow (2011) Corporate Governance. 5th Edition. New York, Wiley.
  Hansmann H (2000) The Ownership of Enterprises. Cambridge MA, The Belknap Press of Harvard University.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction to Corporate Governance

• 1.1 Introduction
• 1.2 Approaches to Corporate Governance
• 1.3 The Evolution of Corporate Structure
• 1.4 Corporate Governance, Capital Formation, Corporate Finance and Economic Growth
• 1.5 Concluding Remarks

Unit 2 Theory of the Firm

• 2.1 Competition and Cooperation
• 2.2 Market Contracting Costs vs Ownership Costs
• 2.3 Recent Unconventional Developments
• 2.4 More on Complementary Perspectives
• 2.5 Concluding Remarks

Unit 3 Corporate Governance and the Role of Law

• 3.1 The Basic Question in the Debate
• 3.2 Competing Explanations
• 3.3 The Recent Rise of Equity Culture in the EU
• 3.4 A Historical Perspective
• 3.5 Implications for Transition and Developing Economies

Unit 4 Corporate Governance Around the World

• 4.1 A Framework for Comparison
• 4.2 Equity Market-based System vs Bank-led System
• 4.3 Family-based Corporate Governance in Asia
• 4.4 The Pyramid Structure and the Internal Capital Market
• 4.5 Concluding Remarks

Unit 5 Board Composition and Control

• 5.1 Board Composition and Control: Practical and Theoretical Trade-offs
• 5.2 The Typical Anglo-American Board: Past and Present
• 5.3 The Legal Framework Governing the Board
• 5.4 The Board Management Relationship in Reality
• 5.5 Director Selection
• 5.7 Concluding Remarks

Unit 6 CEO Compensation

• 6.1 Introduction: Major Challenges Faced by CEOs
• 6.2 Why CEOs Fail
• 6.3 An 'Ideal' CEO
• 6.4 CEO Compensation and Employment Contract
• 6.5 Stock Options
• 6.6 Case Study: General Electric
• 6.7 Concluding Remarks

Unit 7 International Governance

• 7.1 Corporate Governance has Gone Global
• 7.2 Why Do Companies List Abroad?
• 7.3 Crisis-Driven Reforms in Emerging Markets
• 7.4 Reforms in the Developed World
• 7.5 The Case of Daimler Chrysler
• 7.6 Concluding Remarks

Unit 8 Overview of Corporate Governance Codes

• 8.1 The OECD Principles (1999–2004)
• 8.2 The International Corporate Governance Network (ICGN) Principles
• 8.3 Other Leading International Codes
• 8.4 Reports on the Observance of Standards and Codes
• 8.5 Concluding Remarks

Module samples

• M444 Module Introduction (PDF)
• M444 Specimen Examination (PDF)
• M444 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

The dissertation is a supervised piece of research on a topic that we will agree with you. The length will be 10,000 words. Before we can consider a proposal to submit a dissertation we will need to review your academic performance so far.

Students wishing to take the Dissertation should ideally do so in their second or third year of study. Students will need to enrol for the Dissertation before the enrolment deadline for Session Two of each academic year. It will not be possible to enrol onto the Dissertation past this point. The annual Dissertation period is March to October.

With the exception of the MSc Finance (Quantitative Finance) programme, if you wish to write a dissertation you are required to successfully complete the tutor marked assignments for the Research Methods module before proceeding to the Dissertation.

Module objectives

The Dissertation module aims to make students develop the capabilities and skills required to undertake a supervised research project at master's level of study and to write the results of the study at the academic level. Detailed objectives are:

• To develop research capabilities and skills at postgraduate (master's) level.
• To develop the capacity and skills to pursue an independent inquiry.
• To produce a coherent and logically argued piece of writing that demonstrates competence in research and the ability to operate independently.
• To develop knowledge, capabilities and skills on issues of research design, methodology, and research ethics.

Learning outcomes

By the end of the module students will be able to:

• evaluate and apply the methods acquired in the Research Methods course to write a dissertation,
• apply epistemological and ontological concepts to intellectual enquiry,
• analyse and critique the research of others,
• choose an appropriate method for investigating your own research question
• collect, present and interpret data using qualitative or quantitative methods,
• carry out an effective and ethical research project – from the proposal initiation stage, through the literature search, data collection and analysis to the final writing-up and presentation of results,
• demonstrate the capacity to work independently under the guidance of an academic supervisor,
• show that they have followed good academic research practice and have achieved a good level of competence in academic writing.

Study calendar 2022/23

Study calendars are subject to change.

Disclaimer

Important notice regarding changes to programmes and modules

The starting point for understanding any financial market is that, on a large scale, firms and governments have to turn to institutions (such as banks) and markets (such as bond markets) to finance their core operations. Even if a government or firm currently has no need to borrow or obtain new capital funds, it operates on financial markets to manage its old financial liabilities (such as its outstanding bonds which are traded on markets) or to invest currently surplus funds. At the same time, banks and other financial institutions essentially operate on financial markets as their main business activity.

The fundamental fact underlying this module is that such large players’ financial operations take place on financial markets that are international in character. That is especially true now that, since the 1970s, economies have experienced a fast pace of globalisation. For centuries firms’ and governments’ financial operations have generally involved an international dimension, but modern globalisation has been accompanied by changes in both its scale and its character.

You will study a variety of theories throughout the module, which seek to explain the ways in which finance is handled internationally. One question we want you to keep in mind throughout your study of is: ‘Is the theory true?’ Whatever your answer, your next step should be to consider the related, but different question ‘Is the theory useful?’

Learning outcomes

When you have completed your study of this module you will be able to:

• explain the nature of an exchange rate regime, and assess the future evolution of such regimes
• identify and discuss drivers of the growth of the global foreign exchange market
• explain the nature of exchange rate quotations
• discuss the foreign exchange market microstructure
• interpret balance of payments accounts
• use purchasing power parity measures of gross domestic product (GDP)
• explain the law of one price
• assess the uses of absolute purchasing power parity and relative purchasing power parity
• explain how firms can use currency derivatives to manage risks through hedging
• discuss what determines whether firms do use currency derivatives for hedging
• discuss models and empirical evidence on the difference between the beta coefficient of multinational enterprises as compared with domestic firms
• outline evidence on the connection between agency costs and the capital structure of multinational enterprises
• explain the main features of 'third generation' models of currency crises
• discuss the effects of regulatory regimes on firms' choice of stock exchange for their foreign listings
• explain the differences and relative merits of project finance compared to corporate finance as methods of raising international finance
• compare them with the main features of first and second generation models

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Eiteman DK, AI Stonehill & MH Moffett (2021) Multinational Business Finance. 15th (Global) Edition. Pearson Higher Education.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 The International Context of Finance

• 1.1 Exchange Rate Regimes
• 1.2 Fixed and Floating Exchange Rates
• 1.3 Exchange Rate Regimes – a Bipolar Future?
• 1.4 Recent Examples of Hard Pegs and Intermediate Regimes
• 1.5 A New Bretton Woods System?
• 1.6 Conclusion

Unit 2 The Markets for Foreign Exchange

• 2.1 A Global Twenty-Four-Hour Market
• 2.2 The Mechanics of the Foreign Exchange Market
• 2.3 Hedging Techniques
• 2.4 Market Microstructure
• 2.5 Conclusion

Unit 3 Exchange Rates and Prices

• 3.1 Introduction
• 3.2 The Balance of Payments
• 3.3 A Standard for Measuring Economies
• 3.4 Purchasing Power Parity Theory
• 3.5 The Big Mac Measure
• 3.6 Empirical Evidence – Short-Run Deviations from Purchasing Power Parity
• 3.7 Conclusion

Unit 4 Exchange Rates and Interest Rates

• 4.1 Introduction
• 4.2 Interest Rates and Exchange Rates
• 4.3 Interest Rate Parity
• 4.4 Conclusion

Unit 5 Managing Foreign Exchange Exposure

• 5.1 Introduction
• 5.2 Types of Risk Exposures and Their Management
• 5.3 Financial Firms' Management of Currency Exposure
• 5.4 Empirical Studies on Currency Hedging
• 5.5 Conclusion

Unit 6 International Corporate Finance and Project Finance

• 6.1 Introduction
• 6.2 Corporate Finance – Going International
• 6.3 Corporate Finance – International Equity Markets
• 6.4 International Bond Issues
• 6.5 How Diversification Affects Firms' Financial Needs
• 6.6 More Reading and a Conclusion

Unit 7 Capital Structure and Cost of Capital in International Financing

• 7.1 Introduction
• 7.2 How International Financing Affects Firms' Costs
• 7.3 Does Localisation Matter?
• 7.4 Conclusion

Unit 8 Tax Policies of Multinationals

• 8.1 Introduction
• 8.2 International Tax Environment
• 8.3 T ax Arbitrage
• 8.4 Conclusion

Module samples

• M442 Module Introduction (PDF)
• M442 Specimen Examination (PDF)
• M442 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

Welcome to the module Law and Regulation of Electronic Finance and Internet Banking. This module aims to give you an appreciation of how the internet facilitates the electronic delivery of banking and other financial services. It will examine the development of internet banking from its earliest days, to where it is now, and will consider what the future may hold. Similar treatment will be afforded to online share-dealing venues as well as raising business capital through the internet.

The module will present comparative information on the prudential regimes and attendant laws and regulations relating to banking and securities in the European Union, the United Kingdom and the United States. How governments facilitate and regulate contracts for financial products and services online will also be explored, as will issues relating to the protection of personal data in an online environment, including the role of whistleblowers.

Learning outcomes

When you have completed your study of this module, you will be able to:

• discuss internet banking from its origins in the early 2000s to the most recent developments
• explain the concept of prudential supervision and the underlying public policy, and identify and describe the banking supervisory frameworks in the EU, UK and US
• identify and critically discuss government regulation of the business of banking in the EU and the US
• define and distinguish the concepts of harmonisation and mutual recognition in the context of cross-border banking services in the EU, and critically discuss the concept of the ‘general good’ derogation which underpins prudential regulation and consumer protection
• critically discuss the methods by which risk is allocated between banks and their customers in the provision of banking services
• identify and critically discuss issues arising in online share-trading with regulated entities and how Conduct of Business rules apply to online brokerage firms
• critically discuss how securities regulators have addressed crowdfunding, robo-advisers and initial coin offerings as well as facilitating use of the internet for securities offerings exempt from registration
• identify EU and US prudential securities regulators and critically discuss the adoption of the ‘effects’ test with respect to the assertion of regulatory jurisdiction
• define and analyse the prudential issues for securities regulators arising from securities activities conducted through the internet
• identify and critically discuss the relevant EU directives applicable to the marketing of financial services over the internet to consumers
• outline the circumstances under which financial services firms may fulfil their regulatory or statutory responsibilities by electronic delivery of mandated disclosures
• identify and critically discuss EU and US legislation facilitating the creation of enforceable contracts online, and each region’s approach to the use and choice of law clauses and mandatory arbitration clauses in those contracts
• describe and critically discuss the provisions of EU law as it relates to the protection of personal data of consumers or customers of financial service providers, and the terms of the US/EU Privacy Shield Framework
• outline and analyse the public policy underlying the use of whistleblowers to identify wrongdoing by financial services establishments, and the tensions which such policy has caused with respect to existing EU provisions relating to the protection of personal data.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Gkoutzinis A (2010) Internet Banking and the Law in Europe. Cambridge UK, Cambridge University Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction

• 1.1 The Promise of Internet Banking
• 1.2 Digital Products and Services
• 1.3 Data Aggregators and Paymant Systems
• 1.4 The Rise of Fintechs
• 1.5 Fintechs and Banking
• 1.6 Millennials and the Business of Banking
• 1.7 Banks and Big Data
• 1.8 AI and Banking
• 1.9 Cryptocurrencies

Unit 2 Prudential Supervision of Banking

• 2.1 Prudential Regulation of Banking
• 2.2 The EU Supervisory Framework
• 2.3 Prudential Bank Regulation in the United Kingdom
• 2.4 Prudential Bank Regulation in the US

Unit 3 Government Regulation of the Business of Banking

• 3.1 Regulation in the European Union (EU)
• 3.2 Regulation in the United States

Unit 4 Allocation of Risks in the Business of Banking and Financial Services

• 4.1 Allocation of Risk by Statute
• 4.2 Allocation of Risk in Bank–Customer Contracts
• 4.3 Judicial Forum Selection Clauses
• 4.4 Waiver of Jury Trial or Access to Courts
• 4.5 Arbitration Provisions
• 4.6 Burden of Proof

Unit 5 Securities Activities on the Internet

• 5.1 Internet Share Trading Venues
• 5.2 The Rise of Robo Investment Advisers
• 5.3 Issues Relating to Online Securities Offerings
• 5.4 Crowdfunding in the US and UK
• 5.5 Other Internet-Based Securities Offerings
• 5.6 Virtual Currency and Initial Coin Offerings

Unit 6 Prudential Regulation of Securities Activities

• 6.1 Assertion of Regulatory Jurisdiction in an Online World
• 6.2 US State Securities Regulators
• 6.3 Securities Regulators in the EU, UK and US
• 6.4 Prudential Issues Relating to the Regulation of Investment Firms

Unit 7 Marketing and Delivering Financial Services over the Internet

• 7.1 Introduction
• 7.2 EU Electronic Commerce Directive (2000)
• 7.3 EU Distance Marketing Directive (2002)
• 7.4 EU Unfair Commercial Practices Directive (2005)
• 7.5 EU Directive on Unfair Terms (1993)
• 7.6 EU Directive on Alternative Dispute Resolution for Consumer Disputes (2013)
• 7.7 Electronic Signatures
• 7.8 Electronic Delivery of Mandated Disclosures

Unit 8 Consumer Privacy and the Internet and Whistleblowers

• 8.1 Leaky Ships – Data Security in Financial Services
• 8.2 Data Protection – The EU Dimension
• 8.3 Data Protection – The US Dimension
• 8.4 EU-US Framework on the Transfer of Personal Data
• 8.5 Whistleblower Schemes – The Personal Data Dimension

Module samples

• M445 Module Introduction (PDF)
• M445 Specimen Examination (PDF)
• M445 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

This module, Legal Aspects of Corporate Finance, provides an understanding of the essential elements of the legal principles and institutions governing corporate finance at the national and international level. It complements the finance module, Corporate Finance, which together provide a comprehensive and coherent appreciation of the financial and legal aspects of the subject.

Learning outcomes

When you have completed your study of this module, you will be able to:

• outline and discuss the importance of corporate law for the creation of strong securities markets
• analyse the concepts of corporate personality and limited liability, the types of companies, the formation of the most important types of companies and key aspects of corporate constitutions
• explain and critically discuss the legal components of the financial structure and membership of corporations
• examine and discuss the key issues relating to the taxation of corporate profits and their implications for international competition in trade and investment
• outline and discuss the division of power between shareholders and directors in the internal governance of corporations and issues of liability relating to the obligations and rights of those – often competing – groups
• critically assess the legal aspects of corporations' attempts to raise finance from the public
• outline and discuss important legal and regulatory developments relating to takeovers and mergers against the background of general corporate law.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: 
  • Worthington S (2016) Sealy & Worthington's Text, Cases, and Materials in Company Law. 10th Edition. Oxford University Press.
  • French D (2021) Blackstone's Statutes on Company Law 2021–2022. 25th Edition. Oxford University Press.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Incorporation and the Corporate Constitution

• 1.1 Introduction
• 1.2 Corporate Personality and Limited Liability
• 1.3 Types of Company
• 1.4 How a Company Is Formed
• 1.5 A Company's Constitution
• 1.6 Corporate Capacity
• 1.7 Articles of Association
• 1.8 How a Company Acts
• 1.9 Groups of Companies
• 1.10 Conclusion

Unit 2 Financial Structure and Membership

• 2.1 The Concept of Capital and the Financing of Companies
• 2.2 Share Capital
• 2.3 Capital Maintenance
• 2.4 Prohibition on Financial Assistance
• 2.5 Profit Distributions
• 2.6 Different Classes of Shares
• 2.7 Legal Incidents of Membership (Ownership of Shares)
• 2.8 Transfer of Shares
• 2.9 Debt Capital-Debentures
• 2.10 Conclusion

Unit 3 The Taxation of Companies

• 3.1 Background issues
• 3.2 UK Corporation Tax
• 3.3 Cross-border Taxation
• 3.4 Conclusion

Unit 4 Corporate Governance

• 4.1 Division of Power between Shareholders and Directors
• 4.2 Directors
• 4.3 Directors' Meetings
• 4.4 Shareholders' Meetings
• 4.5 Directors' Duties
• 4.6 Fair Dealing by Directors
• 4.7 Breach of Duty and Third Parties
• 4.8 Shareholders' Remedies
• 4.9 Conclusion

Unit 5 Public Disclosure of Information

• 5.1 Introduction
• 5.2 Financial Statements
• 5.3 Auditors
• 5.4 Other Information to be Made Available
• 5.5 Registration of Charges (Security Interests)
• 5.6 Company Investigations
• 5.7 Conclusion

Unit 6 Raising Capital from the Public

• 6.1 Introduction
• 6.2 Securities Markets and Securities Regulation Generally
• 6.3 Securities Regulation in the UK
• 6.4 Public Securities Offerings
• 6.5 Liability for Misstatements in Listing Particulars and Prospectus
• 6.6 Insider Dealing
• 6.7 Market Abuse
• 6.8 Corporate Finance Transactions
• 6.9 Conclusion

Unit 7 Regulation of Takeovers and Mergers

• 7.1 Introduction
• 7.2 Overview of Statutory Regime
• 7.3 Methods of Takeover
• 7.4 Takeover Code
• 7.5 Listing Rules
• 7.6 Compulsory Buy-out
• 7.7 Competition Law Aspects
• 7.8 Directors' Role In a Takeover
• 7.9 Conclusion

Unit 8 Corporate Collapse

• 8.1 Insolvency Law – Introduction
• 8.2 Overview
• 8.3 Company Voluntary Arrangements (CVA)
• 8.4 Administration
• 8.5 Receivership
• 8.6 Liquidation (Winding-up)
• 8.7 The Liquidation Process
• 8.8 Effect on Prior Transactions
• 8.9 Trading while Insolvent
• 8.10 Conclusion

Module samples

• M439 Module introduction (PDF)
• M439 Specimen examination (PDF)
• M439 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

Welcome to this module on the legal aspects of international finance. The first unit will introduce you to some of the topics you will study. This introduction will provide and outline some important information on Assessment and the on the Study process.

The teaching of this module is based on English law and makes reference to the law of other jurisdictions where this is relevant. You will be shown how contractual principles are applied to commercial fundraising transactions and how to differentiate between legal principles and the market practices that shape these transactions.

This module covers the legal aspects that complement the financial modules Finance in the Global Market and Banking and Capital Markets. The teaching is based on English law and makes reference to the law of other jurisdictions where this is relevant. You will be shown how contractual principles are applied to commercial fundraising transactions and how to differentiate between legal principles and the market practices that shape these transactions.

Learning outcomes

When you have completed the study of this module and its readings you will be able to:

• outline the difference forms of international finance available in global capital markets and the role of the primary and secondary market
• evaluate the key issues associated with the different forms of debt finance and alternative investment funds
• determine the role of the various parties involved in the different forms of international finance
• evaluate the importance of derivatives and securitisation as a form of international finance and risk management technique
• analyse the key contractual provisions and documentation associated with the different forms of debt finance and alternative investment finance
• explain the role of payment and settlement systems in international finance
• critically assess the importance of the choice of law and jurisdiction clause in international financial transactions.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Key texts: Hudson A (2013) The Law of Finance. 2nd Edition. Sweet & Maxwell.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 The Law of International Finance

• 1.1 Introduction
• 1.2 The International Financial Market
• 1.3 Introduction to International Finance
• 1.4 Legal Aspects of International Finance
• 1.5 Introduction to International Capital Markets
• 1.6 Dealing with Risk in International Finance
• 1.7 Conclusion

Unit 2 International Loan Finance

• 2.1 Introduction
• 2.2 International Term Loan Agreements
• 2.3 Syndicated Loans
• 2.4 Structure of Typical Syndicated Loan
• 2.5 Secondary Market
• 2.6 Conclusion

Unit 3 Corporate and Sovereign Bonds

• 3.1 Introduction
• 3.2 Forms and Legal Characteristics of International Bonds
• 3.3 Issuing an International Bond – the Parties and Documentation
• 3.4 Issuing, Marketing and Distributing the Bonds
• 3.5 Basic Legal Terms and Conditions
• 3.6 Tax Considerations
• 3.7 Contractual Aspects of Sovereign Bond Offerings
• 3.8 A Brief Note on State Insolvency
• 3.9 Differences between Corporate and Sovereign Bonds
• 3.10 Conclusion

Unit 4 Project Finance

• 4.1 Introduction
• 4.2 What is Project Finance?
• 4.3 Special Features of Project Finance
• 4.4 Security in Project Finance
• 4.5 Some Particular Types of Contract
• 4.6 PPPs and PFIs
• 4.7 Conclusion

Unit 5 Financial Derivatives and Securitsation

• 5.1 Introduction to Financial Derivatives
• 5.2 Basic Aspects of International Derivatives Markets
• 5.3 Managing Legal Risk in International Derivative Transactions
• 5.4 Capacity and Authority to Enter into Financial Derivative Contracts
• 5.5 Termination and Close-Out Netting
• 5.6 The Structure and Main Provisions of the 2002 ISDA Master Agreement
• 5.7 Central Counterparties
• 5.8 Trade Repositories
• 5.9 Securitisation
• 5.10 Conclusion

Unit 6 Alternative Investment Funds

• 6.1 Alternative Investments
• 6.2 Private Equity
• 6.3 Equity-Debt-Leverage Finance
• 6.4 Hedge Funds
• 6.5 Risks
• 6.6 Comparing Hedge Funds and Private Equity Funds
• 6.7 Conclusion

Unit 7 Payment and Securities Settlement Systems

• 7.1 Introduction and Overview of Payment Systems
• 7.2 Risks and Legal Issues in Payment Systems
• 7.3 Types of Payment System
• 7.4 Securities Settlement Systems
• 7.5 Risks and Legal Issues in Securities Settlement Systems
• 7.6 Implications of Using Intermediaries
• 7.7 Financial Collateral
• 7.8 Conclusion

Unit 8 Conflict of Laws, Jurisdiction and Enforcement

• 8.1 Introduction to the Conflict of Financial Laws
• 8.2 The Choice of Governing Law by the Parties
• 8.3 Choice of Jurisdiction
• 8.4 Legal Opinions
• 8.5 Conclusion – Conflict of Laws and International Financial Markets

Module samples

• M441 Module Introduction (PDF)
• M441 Specimen Examination (PDF)
• M441 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

This module, Regulation of International Capital Markets, is specially designed for postgraduates studying finance and financial law. It is designed to contribute to your enhanced understanding of the ways in which governments and public authorities intervene in the operation of financial markets. It is not necessary for you to have studied financial regulation previously.

The module examines the public regulation of financial markets – that is, the relationship between central government, independent government agencies or indeed international organisations on the one hand, and financial markets or market participants on the other. The contractual relationship between financial intermediaries and their customers will not be examined as such, although there are some strong links between public regulation and private law duties. This module will focus on the principles of regulation of international financial markets.

Learning outcomes

When you have completed your study of this module, you will be able to:

• outline and discuss the main reasons for government intervention in financial markets
• analyse the inherent weakness of the financial system and explain the role of law in correcting those deficiencies
• explain the reasons for and techniques of banking regulation and supervision
• examine and discuss the importance of capital regulation for the stability of the banking system
• outline and discuss the methods and instruments of securities regulation in a range of issues, including Initial Public Offerings, financial intermediaries, securities trading, fraudulent practices and takeovers
• critically assess the regulatory components of the global financial system
• analyse the legal components of current work towards a stronger global financial system following a recent sequence of devastating crises in Asia, Latin America and elsewhere.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction to Financial Regulation

• 1.1 Introduction
• 1.2 The Concepts of Regulation and Supervision
• 1.3 Instruments of Regulation
• 1.4 Who Regulates: Institutions and Structures
• 1.5 Methods of Regulatory Enforcement
• 1.6 Financial Regulation: An Introduction
• 1.7 Concluding Remarks

Unit 2 Central Banking and Banking Regulation

• 2.1 Introduction
• 2.2 Forms and Instruments of Financial Regulation
• 2.3 The Organisational Structure of Financial Regulation
• 2.4 The Nature of Banking Risks
• 2.5 Why Regulate the Banking System
• 2.6 The Role and Functions of the Central Bank
• 2.7 The Failure of Northern Rock – A Case Study
• 2.8 Concluding Remarks

Unit 3 Introduction to International Capital Markets

• 3.1 Introduction
• 3.2 Financial Markets and Financial Assets
• 3.3 Primary and Secondary Capital Markets
• 3.4 The Internationalisation of Capital Markets
• 3.5 The Globalisation of Financial Crises
• 3.6 Conclusions

Unit 4 Regulation of Primary Securities Markets in the United States

• 4.1 Introduction
• 4.2 Introduction to Primary Securities Markets
• 4.3 Overview of the Regulatory Framework
• 4.4 Mandatory Disclosure and the Efficient Capital Market Hypothesis
• 4.5 Regulation of Primary Securities Offerings in the United States
• 4.6 Conclusions

Unit 5 Financial Integration and Regulation of Primary Securities Markets in the European Union

• 5.1 Introduction to International Financial Integration
• 5.2 EU Policies and Institutional Mechanisms of Financial Integration
• 5.3 The Financial Services Action Plan
• 5.4 The Core EU Measures Regulating the Primary Market
• 5.5 Conclusions

Unit 6 International Regulation of Securities Firms

• 6.1 The Role of Market Intermediaries in Securities Markets
• 6.2 Regulation of Securities Firms – an Introduction
• 6.3 Federal Regulation of Securities Firms in the United States
• 6.4 Regulation of Securities Firms in the United Kingdom
• 6.5 International Aspects of Regulation of Securities Firms in Europe
• 6.6 Conclusions

Unit 7 International Regulation of Secondary Securities Markets

• 7.1 The Structure and Economic Functions of Secondary Securities Markets
• 7.2 The Economic Rationale for Regulating Secondary Securities Markets
• 7.3 Market Regulation in the United States
• 7.4 Market Regulation in the European Union – The Market Abuse and Transparency Directives
• 7.5 Market Regulation in the United Kingdom
• 7.6 Conclusions

Unit 8 Global Capital Markets and Development of International Rules

• 8.1 The Globalisation of Finance
• 8.2 Building International Financial Stability
• 8.3  Developing International Rules and Regulatory Standards for Capital Markets
• 8.4 Financial Regulation in the European Union in the Aftermath of the 2008 Financial Crisis
• 8.5 Fighting International Financial Crime
• 8.6 Conclusions

Module samples

• M443 Module Introduction (PDF)
• M443 Specimen Examination (PDF)
• M443 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

Research plays an essential role in business and in public policy and management. Increasingly, organisations undertake small-scale research projects, to find out about matters relating to the concerns of their organisation or to critically evaluate existing policies. Both commercial firms and government institutions rely upon research to inform their decisions, to test the effectiveness of existing policies, to predict the effects of intended future policies, to understand management processes and decisions and to gain insights into public preferences and opinions about public services.

Whether you are studying this module in order to carry out research in your professional role, to commission and project-manage research conducted by others or to complete a dissertation for your MSc qualification, your ability to appropriately and rigorously design, execute report, and evaluate research is essential.

The range of research issues and research methods available for researchers to use is vast – too vast to be covered in one introductory module. Therefore, this module concentrates on helping you develop a rigorous understanding of the key principles and practice of research that are needed to get a research project up and running.

Learning outcomes

When you have completed this module, you should feel confident of your ability to conduct an effective research project – for an MSc dissertation, for your professional work or for personal interest. In particular, you will be able to:

• evaluate the relevance and application of the research methods introduced to answer different types of research question
• define and discuss the basic epistemological and ontological concepts related to intellectual enquiry
• analyse and critique the research of others
• choose an appropriate method for investigating your own research question
• carry out an effective and ethical research project – from the proposal initiation stage, through the literature search, data collection and analysis to the final writing-up and presentation of results
• analyse and present qualitative or quantitative data
• evaluate the validity of your own and others' research
• write up research effectively.

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

• Study guide: The study guide contains 10 units. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Virtual Learning Environment.
• Key texts: Denscombe M (2021) The Good Research Guide: For Small-scale Research Projects. 7th Edition. Open University Press.
  McMillan K & J Weyer (2011) How to Write Dissertations and Project Reports. 2nd Edition. Prentice Hall.
• Readings: Throughout the module you will be directed to study a selection of readings, including journal articles, book extracts and case studies that are of particular relevance and interest to the topics covered in the module.
• Case studies: Examples of the various research techniques taught in the module will be illustrated using case studies – you will be directed to look at them when relevant in the unit text.
• Virtual learning environment: You will have access to the VLE, a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 The Nature of Research

• 1.1 What is Research – Pure and Practical?
• 1.2 The Relationship between Theory, Research and Data
• 1.3 Quantitative and Qualitative Research Methods in Social Research
• 1.4 Objectivity and Reflexivity

Unit 2 Planning and Designing Research

• 2.1 Planning and Managing Time and Resources
• 2.2 Formulating and Focusing the Research Topic
• 2.3 Choosing a Research Strategy and Design
• 2.4 Ethical Considerations and Issues of Access

Unit 3 Reviewing the Literature and Making Methodological Choices

• 3.1 Introduction
• 3.2 The Purpose of Searching and Reviewing Literature
• 3.3 Planning Your Search of the Literature
• 3.4 Recording the Literature
• 3.5 Writing a Critical Review
• 3.6 Some Common Faults in Literature Reviews

Unit 4 Data

• 4.1 What is Measurement?
• 4.2 Measurement Issues
• 4.3 Data Classification and Why it Matters
• 4.4 Describing Data
• 4.5 Variance and Standard Deviation
• 4.6 Sampling and Selection

Unit 5A Interviews, Focus Groups and Surveys

• 5A.1 Introduction to the Interview
• 5A.2 Types of Research Interviews
• 5A.3 Administration of Interviews
• 5A.4 When to Use Interviews
• 5A.5 Designing Research Interviews
• 5A.6 Conducting Interviews
• 5A.7 Recording and Transcribing Interviews
• 5A.8 How Do We Know the Informant is Telling the Truth?
• 5A.9 Analysing Interview Data
• 5A.10 What is a Questionnaire?
• 5A.11 Types and Administration of Questionnaires
• 5A.12 Constructing Questionnaires
• 5A.13 Coding Questions
• 5A.14 Pilot-Testing Questionnaires
• 5A.15 Ethics in Questionnaire Research
• 5A.16 Data Analysis
• 5A.17 Conclusion

Unit 5B Introduction to Data Analysis I

• 5B.1 Introduction to Data Analysis
• 5B.2 Probability Distributions
• 5B.3 Hypothesis Testing
• 5B.4 Conclusion

Unit 6A Fieldwork and Observation

• 6A.1 What is Ethnography? An Overview
• 6A.2 The Emergent Nature of Research Design, Data Collection and Analysis
• 6A.3 Identifying the Research Topic and Conducting Fieldwork
• 6A.4 Roles and Relationships in Field Observation
• 6A.5 Note-Taking and Types of Research Notes
• 6A.6 Analysing Data and Writing Ethnographic Accounts
• 6A.7 An Overview of Action Research
• 6A.8 What is Participatory Action Research?
• 6A.9 Conducting Participatory Evaluation
• 6A.10 Data Analysis in Dissemination of Results in PAR and Participatory Evaluation

Unit 6B Introduction to Data Analysis II

• 6B.1 Non-Parametric Analysis
• 6B.2 Simple Tests for Categorical Data
• 6B.3 Multivariable Analysis – Correlation
• 6B.4 Multivariable Analysis – Simple Linear Regression
• 6B.5 Conclusion

Unit 7 Validity and Reliability

• 7.1 Introduction
• 7.2 Threats to Internal Validity
• 7.3 Threats to External Validity
• 7.4 Threats to Validity in Qualitative Research
• 7.5 Triangulation as a Solution to Validity Threats
• 7.6 Examples
• 7.8 Conclusion

Unit 8 Writing and Presenting Research

• 8.1 Writing Research Proposals
• 8.2 Writing Research Reports
• 8.3 Ethics in Reporting Research
• 8.4 Evaluating Your Research Report

Module samples

• M453 Module Introduction (PDF)
• M453 Specimen Examination (PDF)
• M453 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules

Welcome to this module on Risk Management: Principles and Applications. This module has four main aims, to:

• illustrate the main types of risk
• present the most important ideas and methods used in the analysis of portfolios of financial securities, including stocks and bonds
• explain how rational investors can use financial derivatives (mainly, futures and options) in order to alter the risk of their investment position
• illustrate some more specialised risk management techniques, such as Value at Risk and Credit Risk.

The emphasis throughout is on the general principles behind the investment decisions, rather than on case studies or anecdotal evidence. Thus, you will study, for instance,

• the main features of portfolios, which include stocks and bonds,
• how to calculate their risk, and
• how investors can combine their holdings of different securities to reduce their overall risk without sacrificing return.

Similarly, when you deal with futures and options, you will explore how these instruments can be used to manage risk and to expand the opportunity set of investors.

Learning outcomes

When you have completed this module, you will be able to:

• outline the most important strategies of risk management
• explain how stocks and bonds can contribute to the risk and return of a financial portfolio
• discuss the key principles of diversification of financial investment
• correctly measure the risk of financial portfolios
• explain the risk profile involved in financial derivatives, such as futures and options
• discuss the importance of Value at Risk and scenario analysis
• define and use the principles of credit risk analysis

Tuition and assessment

Students are individually assigned an academic tutor for the duration of the module, with whom you can discuss academic queries at regular intervals during the study session.

You are required to complete two Assignments for this module, which will be marked by your tutor. Assignments are each worth 15% of your total mark. You will be expected to submit your first assignment by the Tuesday of Week 6, and the second assignment at the end of the module, on the Tuesday after Week 10. Assignments are submitted and feedback given online. In addition, queries and problems can be answered through the Virtual Learning Environment.

You will also sit a three-hour examination on a specified date in September/October, worth 70% of your total mark. An up-to-date timetable of examinations is published on the website in July each year.

Study resources

Study guide: The module study guide is carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the assigned readings.

Key texts: Elton EJ, Gruber MJ, SJ Brown & WN Goetzmann (2014) Modern Portfolio Theory and Investment Analysis. 9th Edition. John Wiley & Sons.
Hull JC (2017) Fundamentals of Futures and Options Markets. 9th Edition. Pearson
Crouhy M, D Galai & R Mark (2014) The Essentials of Risk Management. 2nd Edition. McGraw-Hill.

Virtual learning environment: You will have access to the VLE, which is a web-accessed study centre. Via the VLE, you can communicate with your assigned academic tutor, administrators and other students on the module using discussion forums. The VLE also provides access to the module Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Study calendar 2022/23

Study calendars are subject to change.

Module overview

Unit 1 Introduction to Risk Management

• 1.1 Introduction to Portfolio Analysis
• 1.2 Risks Faced by Financial and Non-financial Institutions
• 1.3 Financial Securities and Financial Markets
• 1.4 The Mean-Variance Approach
• 1.5 The Opportunity Set under Risk – Efficient Portfolios
• 1.6 Short Sales and Riskless Lending and Borrowing
• 1.7 How to Compute the Efficient Set
• 1.8 Conclusion

Unit 2 Portfolio Analysis

• 2.1 Introduction
• 2.2 The Single-Index Model
• 2.3 Methods for Estimating Betas
• 2.4 Fundamental Betas
• 2.5 Multi-Index Models
• 2.6 Fundamental Multi-Index Models
• 2.7 Conclusion

Unit 3 Management of Bond Portfolios

• 3.1 Introduction
• 3.2 Returns on Bonds
• 3.3 The Term Structure of Interest Rates
• 3.4 Default Risk and Callable Bonds
• 3.5 Duration
• 3.6 Convexity
• 3.7 Passive Bond Portfolio Management – Matching, Immunisation, Indexation
• 3.8 Active Bond Portfolio Management – Index Models
• 3.9 Active Bond Portfolio Management – Swaps
• 3.10 Conclusion

Unit 4 Futures Markets

• 4.1 Introduction
• 4.2 Description of Financial Futures
• 4.3 Pricing of Financial Futures
• 4.4 Futures Strategies
• 4.5 Examples of Using Futures
• 4.6 Interest Rate Futures
• 4.7 Currency Futures
• 4.8 Conclusion

Unit 5 Options Markets

• 5.1 Introduction
• 5.2 Features of Options Contracts
• 5.3 Options on Stocks and Futures
• 5.4 Risk Exposure and Profit Potential of Options and Futures
• 5.5 The Put-Call Parity Formula
• 5.6 Option Pricing – The Black-Scholes Formula
• 5.7 Pricing of Options on Futures
• 5.8 Price Volatility
• 5.9 Conclusion

Unit 6 Risk Management with Options

• 6.1 Introduction
• 6.2 Speculation with Options – Combinations of Calls and Puts
• 6.3 Hedging with Options – against a Price Increase
• 6.4 Hedging with Options – against a Price Decline
• 6.5 Sensitivities of Option Prices
• 6.6 Delta Hedging
• 6.7 The 2007 Credit Crisis and the Role of Derivatives
• 6.8 Conclusion

Unit 7 Value at Risk

• 7.1 Introduction
• 7.2 Definition of Value at Risk
• 7.3 Calculation of Value at Risk – the Variance-Covariance Approach
• 7.4 Delta-Normal VaR
• 7.5 Historical Simulations Approach
• 7.6 Incremental-VaR and DeltaVaR
• 7.7 Stress Testing and Scenario Analysis
• 7.8 Limitations of VaR – EVaR
• 7.9 Conclusion

Unit 8 Credit Risk

• 8.1 Introduction
• 8.2 Credit Rating Systems
• 8.3 Internal Risk Rating
• 8.4 CreditMetrics
• 8.5 Analysis of Credit Migration
• 8.6 Valuation of Bonds
• 8.7 Forward Distribution of Changes in the Value of Bonds
• 8.8 Credit VaR for a Bond or Loan Portfolio
• 8.9 Credit VaR and Calculation of Capital Charge
• 8.10 Conclusion

Module samples

• M423 Module Introduction (PDF)
• M423 Specimen Examination (PDF)
• M423 Unit 1 (PDF)

Disclaimer

Important notice regarding changes to programmes and modules