Course content

Six core modules cover key material in finance, economics, and econometrics. You will also choose two elective modules to allow you to focus on your personal interests. Assessment is a mix of exams and coursework, both individual and group. A dissertation completes the course. The programme starts in September 2012, and extends beyond the normal undergraduate term dates.

The course is delivered through a combination of lectures, classes, and computer lab sessions to ensure you have the right theoretical and technical skills. The modules are taught by staff from both WBS and the Department of Economics at Warwick.

Lectures introduce key theories, concepts, and economic models. In classes you will solve financial problems and numerical exercises, analyse case studies, and make presentations of research published in academic journals.

Lab work will give you hands-on experience of using software to perform finance-related calculations and conduct realistic simulations. Econometric methods are also taught in the lab, so you will learn to apply econometric software to empirical research and financial market estimations.

Core modules

Asset Pricing: Explore the fundamental techniques for valuing risky assets, and the skills required to study the research literature in this area. Become familiar with the basics of option pricing, and gain a detailed knowledge of basic mean-variance analysis and models such as the CAPM and APT.
Econometrics: Undertake training in econometrics with an emphasis on empirical modelling of economic and financial data. Develop the skills necessary for carrying out high quality empirical research, with an emphasis on the application of financial time series techniques.
Empirical Finance: Study the theories and tools used in financial econometrics, including prediction, quantitative methods of asset allocation, volatility, risk modelling, and quantitative asset pricing.
Foundations of Corporate Finance: Examine the principles of corporate finance, review the basic analytical tools, and consider their applications to real-life problems.
Macroeconomics: Review received contemporary macroeconomics, including theory, empirical evidence and policy analysis, and the analytical tools that are available. Learn to apply macroeconomic models to current economic policy issues and become familiar with some of the empirical evidence relating to them.
Microeconomics: Study the essential tools of economic analysis, and learn how to apply them to obtain economic insights into how markets function. Rigorous modelling is stressed, and a problem-solving approach is used.

Dissertation

A 10-12,000 word dissertation gives you the opportunity to develop, test, practise, and apply the techniques and theories you have gained through your studies. You will be supervised and supported throughout by one of our academic staff and will usually submit your dissertation in early September.

Your dissertation is preceded by a series of seminars introducing a variety of research methods used in empirical research in finance. You will examine and discuss varied research papers chosen to illustrate particular techniques and issues to help you with your own research.

Your dissertation work will enable you to complete an original research study in the context of recently published literature. You may also be offered the opportunity to undertake a project for an external organisation. The word limit provides the discipline of writing for a journal whilst being sufficient to describe even the most complex studies.

You may be offered the opportunity to undertake a project for an external organisation.

Recent external projects offered to students of our finance masters courses include:

Corporate ALM project
Relative Volatility Heatmap
Can drivers of credit curves be parameterised?
Is the single name CDS v index CDS basis a useful trading indicator?
Assessing the importance of volatility estimation in portfolio design and risk management
Assessing the role of statistical learning algorithms and directional prediction in asset allocation
Optimisation of the NBS balance sheet
Risk Aggregation in Nationwide
Capital impacts of Sovereign Swap Spread Risk
Pricing multi-asset options using PDE methods
Review of the NAG Library
Annual vs Quarterly reporting: timeliness vs level of detail
What factor distributions are most effective in predicting future performance?
Modelling Market Level Volatility
Evaluation of a proprietary dataset of style equity flows
Value investment strategies for sector/industry selection
Quantitative analysis of fundamental news on the markets - Foreign Exchange
Quantitative analysis of fundamental news on the markets - Euro & US Fixed Income
The effect of interest rates and foreign exchange on stock index valuations across regions and in comparison to the greater world
The effects of Libor shocks on companies profitability and stock price
The liquidity effect of algorithmic trading
Cyclicality of credit ratings

Elective modules

Choose two modules, one of which must be taught by WBS. In previous years we have offered the following electives:

WBS

Advanced Corporate Finance: Understand the effects of asymmetric information on the financing decisions of the firm, the determinants of mergers and acquisitions, and the role of real options.
Behavioural Finance: Explore the role of psychological and social forces that apply to decision-making in financial markets.
Derivative Securities: Study various types of derivative instruments traded in financial markets, the concepts of no-arbitrage pricing and hedging, and the mathematics of the discrete-time binomial models used to price derivatives.
Financial Engineering & Structured Products: Explore recent developments in financial engineering and structuring, and consider the rationale and benefits of financial innovation to the various parties to a transaction.
Financial Reporting & Statement Analysis: Learn to interpret financial statements in context and apply appropriate models and techniques when addressing business issues. Explore how accounting provides data for corporate finance.
Financial Risk Management: Discover how financial organisations identify, quantify, manage, and control risk.
Fixed Income & Credit Risk: Explore the basic financial instruments for managing interest rate and credit risk before progressing to value and hedge with more complex tools.
International Financial Management: Extend the theories of corporate financial management to an international setting. Look specifically at operating and financial risks and the strategies used to minimise these risks.
International Financial Markets: Focus on exchange rates, and key aspects of the foreign exchange market, including market efficiency, modelling and forecasting exchange rates, and active currency portfolio management. Explore the links between monetary policy and exchange rate behaviour.
Investment Management: Review modern portfolio theory and investment analysis. Explore the issues involved in combining securities to construct an optimum investment portfolio, and the nature and role of derivatives in managing risk. Consider how to evaluate a portfolio, and adjust its composition, to ensure optimal performance.
Judgement & Decision-making: Explore the psychology of the decision-making processes involved in financial markets. Consider the origins of rationality and irrationality in financial decision-makers, strategists and managers, and financial markets, and gain an awareness of your own of biases and pitfalls.

Department of Economics

Game Theory: An advanced introduction to the fundamental ideas and models in Game Theory and study applications of these to a variety of different economic contexts.
Industrial Economics: Learn how theories from industrial economics can help you to understand the behaviour of firms in imperfectly competitive markets. Explore how researchers use real-world data to test those theories.
International Monetary Economics: Gain an analytical perspective on key issues in International Monetary Economics, with a focus on recent models and applications.
International Trade Theory: Survey the theoretical literature on international trade, and international economic relations.
Topics in Development & Transition: Examine a selection of key macroeconomic policy issues of concern in developing and transition countries. Review relevant theoretical literature with an examination of practical policy considerations.
Topics in Global Finance: Develop a range of appropriate analytical skills, including dynamic and general equilibrium methods. Apply analytical techniques to real world problems.