This information is for the 2020/21 session.
Teacher responsible
Dr Cameron Peng and Dr Hongda Zhong
Availability
This course is compulsory on the BSc in Finance and BSc in Financial Mathematics and Statistics. This course is available on the BSc in Accounting and Finance, BSc in Actuarial Science, BSc in Business Mathematics and Statistics, BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Management, BSc in Mathematics and Economics and BSc in Mathematics, Statistics and Business. This course is not available as an outside option nor to General Course students.
Students on the BSc in Management can only take this course if they have met the following programme-specific prerequisites: a 1st in MA107 and/or ST107 and email permission from their Senior Undergraduate Tutor.
This course cannot be combined with FM212. Students on the BSc in Accounting and Finance can only take this course if they have met the general course prerequisites as below.
Pre-requisites
Students must have completed: one level 1 Economics course (either EC100 Economics A or EC102 Economics B), MA100 and ST102.
Course content
The course examines the theory of financial decision-making by firms and examines the behaviour of the capital markets in which these decisions are taken. The topics covered are the theory of capital budgeting under certainty in perfect and imperfect capital markets, portfolio theory, equity and bond markets, the capital asset pricing model, efficient markets, derivative pricing, sources of funds, basic theory of capital structure and the cost of capital, company dividend decisions and financial markets and institutions.
This course covers the same topics as FM212. Thus, both FM213 and FM212 are equivalent content-wise. However, compared to FM212, this course puts more emphasis on the underlying statistical theory and relies more on the use of mathematical methods.
Teaching
20 hours of lectures and 15 hours of classes in the MT. 20 hours of lectures and 15 hours of classes in the LT. 2 hours of lectures and 1 hour and 30 minutes of classes in the ST.
Formative coursework
Students are expected to produce written work for classes and to make positive contributions to class discussion.
Indicative reading
Detailed course programmes and reading lists are distributed at the start of the course. Illustrative texts include: Principles of Corporate Finance by Richard Brealey, Stewart Myers, and Franklin Allen, McGraw-Hill Inc.
Assessment
Exam (100%, duration: 3 hours) in the summer exam period.
Key facts
Department: Finance
Total students 2019/20: 462
Average class size 2019/20: 33
Capped 2019/20: No
Value: One Unit
Personal development skills
Important information in response to COVID-19
Please note that during 2020/21 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the situation of students in attendance on campus and those studying online during the early part of the academic year. For assessment, this may involve changes to mode of delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.