ULMS Electronic Module Catalogue
The information contained in this module specification was correct at the time of publication but may be subject to change, either during the session because of unforeseen circumstances, or following review of the module at the end of the session. Queries about the module should be directed to the member of staff with responsibility for the module.
Title Economics of Risk and Uncertainty
Code ACFI131
Coordinator Dr MT Ellington
Finance and Accounting
M.Ellington@liverpool.ac.uk
Year CATS Level Semester CATS Value
Session 2023-24 Level 4 FHEQ Second Semester 15

Pre-requisites before taking this module (other modules and/or general educational/academic requirements):
 

Modules for which this module is a pre-requisite:
 

Programme(s) (including Year of Study) to which this module is available on a required basis:
 

Programme(s) (including Year of Study) to which this module is available on an optional basis:
 

Teaching Schedule
  Lectures Seminars Tutorials Lab Practicals Fieldwork Placement Other TOTAL
Study Hours 24

 6

         30
Timetable (if known)              
Private Study 120
TOTAL HOURS 150

Assessment
EXAM Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
Assessment 1:Written Unseen Examination Assessment Type: Written Unseen Examination, Managed by SAS Duration: 2 hours Weighting: 100% Reassessment Opportunity: Yes Penalty for Late Submission: St  2    100       
CONTINUOUS Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
             

Aims

This module aims to equip students with a good knowledge of economic principles that are very valuable for finance and accounting. Upon successful completion of this course, the students should be able to understand the impact of uncertainty on decision-making. Furthermore, the students should be able to critically evaluate the usefulness of utility theory for decision-making under uncertainty.

Learning Outcomes

(LO1) Students will be able to explain the concepts of risk, risk aversion, and preferences.

(LO2) Students will be able to discuss the importance of expected utility for decision-making under uncertainty.

(LO3) Students will be able to critically evaluate the empirical evidence on the expected utility framework.

(LO4) Students will be able to explain behavioural theories.

(S1) Communication

(S2) Lifelong Learning

(S3) Analytical

(S4) Problem Solving

Teaching and Learning Strategies

Teaching Method - Lectures
Description: Lecture (12 Lectures of 2 hours each)
Scheduled Directed Student Hours: 24 hours
Attendance Recorded: Yes
Students will attend the weekly 2 hours lecture during which the key concepts will be introduced.

Teaching Method – Seminar (6 seminars of 1 hour each)
Description: Face to face sessions
Scheduled Directed Student Hours: 6 hours
Attendance Recorded: Yes
The seminar will take place over 6 weeks. During these sessions, students will apply their knowledge to solve a range of exercises and problems.

Self-Directed Learning Hours: 120 hours
Description: These independent learning hours are aimed at supporting the directed student learning. The module leader will provide guidance in the form of suggested readings, topics, or self-assessment quizzes to complete with the expectation that students are well prepared to contribute to the tutorial activities and to understand the content of lecture s.

The teaching will also be supported by individual online activities. These include self-assessment quizzes that enable students to evaluate their own learning and receive formative feedback instantaneously. Furthermore, discussion boards will be used to further foster the exchange of ideas, thus deepening the knowledge of students and improving their communication skills. These activities will be moderated by the module instructor. Students will also be directed to key academic and practitioner readings to further develop their learning.

This module is a pre-requisite for the following modules:
ACFI234 Theory of Finance II

Skills/Other Attributes Mapping

Skills / attributes: Communication
How this is developed: By contributing to in-class discussions (lectures and seminars).
Mode of assessment (if applicable): Exam

Skills / attributes: Lifelong Learning
How this is developed: In lectures and seminars by critically thinking about decisi on-making when faced with uncertainty.
Mode of assessment (if applicable): Exam

Skills / attributes: Analytical
How this is developed: During the lectures & seminars, the students will be quantifying risk, and analysing the effect of risk on decision-making.
Mode of assessment (if applicable): Exam

Skills / attributes: Problem solving
How this is developed: During the lectures & seminars, the students will gather and synthesise information, compare different approaches to solve problems, and formulate a recommendation.
Mode of assessment (if applicable): Exam

Syllabus
 

• Measurement of Risk
• Preferences and risk aversion
• Decision-making and expected utility
• Portfolio choice
• Behavioural theories

Recommended Texts
Reading lists are managed at readinglists.liverpool.ac.uk. Click here to access the reading lists for this module.