Introduction to Finance and Methods of Quantitative Analysis

Dr Daniel Quigley

Finance

Many people have good business ideas, but these people don’t always have enough money to put their ideas into reality. Finance is about the flow of funds between people with money and people with ideas. For this reason, the financial system is the engine of innovation and economic prosperity. However, finance also has a dark side: Financial crises are frequent, and have the power to paralyse the entire economy.

This course will teach you the most important analytical and statistical tools that are used to make financial decisions in practice. At the same time, you will learn to critically their relationship to the dark side of finance. In the lectures, we will focus on three core topics:

  1. Saving: How do people with money choose which assets to purchase? What measures help us distinguish a good company from a bad one? How do we value assets such as stocks and shares?
  2. Investment: How do firms decide which ideas are worth investing in? How do their choices of investment project affect the value of the firm?
  3. Financial Crises: What can cause the financial system to fail? Is there anything regulators can do to reduce the risks without harming the financial system in good times?

This course is aimed at: This course is a useful introduction for students considering a future career in financial markets. It is also interesting for those who wish to understand the impacts finance has on the economic and political world we live in, and who want to be able to speak fluently and read about financial issues.

Pre-requisite: No knowledge of finance will be assumed, but previous study of an introductory economics course would be an advantage. As for numerical techniques, you should be comfortable manipulating basic equations.For the group exercises in seminars, students should have working computers (PC or Mac) with internet access and Excel.

Required Reading

The lectures will be complemented by reading material from the following sources to be assigned throughout the course:

Beck and deMarzo, Corporate Finance, Pearson.

Bodie, Kane and Marcus, Investments and Portfolio Management, McGraw-Hill.

Independent Commission on Banking Final Report. Download PDF here.

Assessment:

  • 1 Final Exam: 50%
  • 1 Final Essay: 50%

Lecture: 12 x 1 hour 15 minutes (total 15 hrs)

Seminar: 8 x 1 hour 15 minutes (total 10 hrs)