MSc Investment & Finance (January)

20 credits

This class will provide an introduction to financial decision-making, and much of the relevant analysis will be developed from the standpoint of corporate finance. It'll explain how a company should decide on the investments to be undertaken to meet its objectives, generally assumed to be the maximisation of its value. It will be demonstrated that this will require a rate of return on its investments in excess of the return available in the capital market on equally risky financial investments. As a result, it will be necessary to develop an understanding of the capital market risk-return relationship. This will require an appreciation of the nature of risk and how this can be managed by the development of portfolios.

Even though the focus of the class will be on corporate finance, it'll also require an appreciation of how the risk-return tradeoff is determined in the capital market.

Find out more in the class outline for Principles of Finance.

The aim of this class is to provide you with an understanding of the basic principles of financial accounting and financial analysis, the ability to interpret financial statements and their use in assessing the financial position and performance of companies.

This class provides an introduction to the principles of accounting and the analysis of financial statements. It will enable you to prepare financial statements in accordance with International Financial Reporting Standards (IFRS) and to interpret and analyse these statements. Particular emphasis is placed on the accounting concepts and information employed in financial analysis and decision taking.

You'll develop the ability to prepare and interpret financial statements and construct cash forecasts. In addition, you'll develop an understanding of the demand and supply for accounting information; an appreciation of the role of financial analysis and analysts; and an awareness of the statistical characteristics of accounting numbers.

Find out more in the class outline of Accounting & Financial Analysis.

This class aims to provide an introduction to statistical techniques that are commonly used in finance, a basic understanding of econometric analysis, and an appreciation of the general role of quantitative methods in finance. The class will focus on the application of statistical techniques to examine empirical issues in finance, such as corporate finance and stock price analysis.

Find out more in the class outline for Quantitative Methods for Finance.

20 credits

The aim of the class is to provide you with an understanding of the financial system and the roles and functions of financial markets and institutions. A particular emphasis is placed on understanding the roles of intermediaries such as banks and investment firms.

You'll develop an understanding of the various characteristics and roles of fixed income, equity, and foreign exchange markets. While some attention will be given to the UK financial markets, the global nature of financial markets will be widely discussed. This class aims to equip you with an awareness and understanding of financial markets and institutions in the context of the global economy. Particular emphasis will be placed on the role and contribution of the banking sector.

This class covers the reasons for, and nature of, of financial markets and institutions with a particular focus on banking, the global nature of these markets and their regulation.

Find out more in the course outline for International Financial Markets & Banking.

20 credits

The aim of this class are to provide a strong grounding in derivatives that may be used to manage the financial risks faced by individuals, financial institutions and business corporations. It places an emphasis on corporate treasury management and the role of derivatives in managing treasury risk.

Find out more in the class outline for Derivatives & Treasury Management.

10 credits

The class aims to examine the Markowitz (1952) approach to optimal portfolio selection. The class explores issues relating to optimal portfolio choice and issues in passive and active fund management through the lens of the nature of variance, covariance, risk and return. The class introduces practical applications and an extension of basic theory.

Find out more in the class outline for Portfolio Theory & Management.

This class focuses on equity valuation. The aim is to equip students with the knowledge and tools required for analysing the financial performance of firms and measuring their value. Students will be skilled in reviewing financial statements, estimating and assessing financial ratios and relevant accounting and economic data, and use this data for making forecasts and performing equity valuations. In addition, the module will cover the theoretical background for each valuation method and its application with real-life examples and case studies. Also, the module will examine the advantages and disadvantages of the main valuation models. Finally, the ultimate goal is for students to be able to perform and deliver an equity analysis report for any publicly listed firm.

Find out more in the class outline for Equity Analysis class outline.

The aim of this class is to discuss the different ways in which companies can raise funds, internally and externally, the role of capital markets in determining the terms on which funding will be available, the costs and risks of different sources of financing, and the role of taxation.

The class will cover the capital structure decisions of companies, the weighted average cost of capital, the dividend policy of companies, and share repurchases. This class builds on the introductory investment appraisal, risk, return and cost of capital material covered in the first-semester class Principles of Finance.

Find out more in the course outline for Topics in Corporate Finance.

This class aims to build on the knowledge, understanding, and skills acquired in the Quantitative Methods in Finance class and extends it further, especially in the context of time series and panel data analysis. It focuses on applications in finance of econometric techniques and is extended to incorporate panel data analysis methods with their application in finance.

Find out more in the class outline for Empirical Methods in Finance.

While fixed income securities (bonds) have been traded for a far longer time than equities, it's only recently that the trading volume of these instruments has exceeded that of equities in many of the economies with highly developed capital markets. The bond markets for the last 25 years or so have been characterised by rapid innovation and the range of bonds now being traded is quite diverse. Any graduate of an MSc programme in Finance is expected to be familiar with the nature of the valuation of bonds.

This class will put the MSc courses at Strathclyde in a position to provide students with the opportunity to analyse bonds and the markets in which they are traded in more depth than is possible at the moment.

Find out more in the class outline for Fixed Income Analysis class outline.

For this project, you will be supplied with data relating to some issue in finance or accounting, and a preliminary list of hypothesis or questions to be addressed. You will be expected to expand the range of hypotheses to be considered and ways in which the hypothesis can be tested. Whilst all members of the class will consider the same issue the data sets will differ from one person to another.

By providing the data, and a broadly defined research agenda, the research project allow considerably more time to be spent on the analysis of the data and interpretation of results than is feasible in the context of a more conventional dissertation. While the challenge of identifying a research topic and the development of an appropriate data set are to a large extent eliminated it does allow the analytical work to be developed in more depth. The introductory class will review briefly the analysis and techniques that will be relevant for the research work to be undertaken.

Project 2 requires that you undertake a financial analysis of a company from the standpoint of a potential investor and provide an evaluation of the investment potential of the company’s shares. An assessment should be undertaken of the company’s financial position and performance on the basis of both its financial statements and stock market performance. The discussion should also bring out clearly the financial policies of the company and how these impact on the company’s performance. 

This will require an evaluation of its capital expenditure programme, the form of financing adopted by the company, including an evaluation of its capital structure and its sources of equity and debt funding. You should differentiate between the use of internal sources of funding, in the form of retentions, and the new issues of equity, and also discuss the company’s dividend policy to the extent that this is not covered by the discussion of its retention policy. In some companies it may be difficult to identify a consistent policy perspective on some of these issues – this can be documented and its implications assessed. The project should also provide an assessment of the company’s recent stock market performance to put the current share price into context. 

The returns achieved on the company’s shares should be evaluated using an appropriate benchmark as well as the standard market ratios – the earnings yield, dividend yield, etc. The final objective of the project is an assessment of the value of the company and the investment value of its shares. Even the most experienced and capable security analysts find this a very difficult task, even though they may be monitoring a company’s performance and prospects on a continuing basis. You are simply expected to build on the financial information and analysis you have undertaken to produce some tentative assessments of value. As the focus is on the use of financial information you are expected, firstly, to undertake a “fundamental analysis” of the company. Secondly, you are expected to use the various valuation models to provide insights into the determination of the company’s market value.