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 Theory of Finance II
Code ACFI234
Coordinator Dr A Kagkadis
Finance and Accounting
A.Kagkadis@liverpool.ac.uk
Year CATS Level Semester CATS Value
Session 2024-25 Level 5 FHEQ Second Semester 15

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

ACFI225 Econometrics for Finance 1; ACFI130 Data Analytics; ACFI131 Economics of Risk and Uncertainty; ACFI132 Computational Methods 

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

8

        32
Timetable (if known)              
Private Study 118
TOTAL HOURS 150

Assessment

EXAM Duration Timing
(Semester)
% of
final
mark
Resit/resubmission
opportunity
Penalty for late
submission
Notes
Assessment 1: MCQ Assessment Assessment Type: Written examination, not managed by SAS Duration: 2 hours Weighting: 30 % Reassessment Opportunity: Yes Penalty for Late Submission: Standard UoL Pen    30       
CONTINUOUS Duration Timing
(Semester)
% of
final
mark
Resit/resubmission
opportunity
Penalty for late
submission
Notes
Assessment Type: Individual Report Duration: 2 months Size: 3000 words Weighting: 70 % Reassessment Opportunity: Yes Penalty for Late Submission: Standard UoL Penalty Applies Anonymous Assessmen    70       

Aims

This module aims to equip students with knowledge about theories of financial markets. Upon successful completion of this module, students should be able to explain key financial theories. Furthermore, they should be able to use financial data to empirically evaluate the predictions of these theories. Finally, the students should be able to discuss the implications of financial market theories for commercial developments in the private sector.


Learning Outcomes

(LO1) Students will be able to explain key theories in the area of asset pricing

(LO2) Students will be able to critically evaluate financial market theories

(LO3) Students will be able to propose explanations to potentially rationalise financial market anomalies

(LO4) Students will be able to discuss the implications of financial market theories for the financial service industry

(S1) Commercial Awareness

(S2) Communication

(S3) Digital Fluency

(S4) Lifelong Learning

(S5) Analytical

(S6) Problem Solving

(S7) Organisation


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 (8 seminars of 1 hour each)
Description: Face to face sessions
Scheduled Directed Student Hours: 8 hours
Attendance Recorded: Yes
The seminar will take place over 8 weeks. During these sessions, students will be presented with a range of exercises. Furthermore, they will get hands-on experience of using real-world datasets to test financial market theories.

Self-Directed Learning Hours: 118 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 prepa red to contribute to the tutorial activities and to understand the content of lectures.

Journal articles and financial press articles will be used to enrich the learning. 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:
ACFI332 Financial Technology

Skills/Other Attributes Mapping

Skills / attributes: Commercial Awareness
How this is developed: In lectures and seminars, by discussing the implications of capital market theory for the finance industry.
Mode of assessment (if applicable): MCQ Assessment and Individual Report

Skills / attributes: Communication
How this is developed: By contributing to in-class discussions (lectures and seminars), and by preparing the project report.
Mode of assessment (if applicable): MCQ Assessment and Individual Report

Skills / attributes: Digital Fluency
How this is developed: By downloading and writing computer codes to analyse financial data in seminars. The students will also develop their skills by using digital tools and specialist software to engage with the course material, to undertake additional research, and to communicate
Mode of assessment (if applicable): MCQ Assessment and Individual Report

Skills / attributes: Lifelong Learning
How this is developed: In lectures and seminars by developing a critical understanding of financial markets.
Mode of assessment (if applicable): Individual Report

Skil ls / attributes: Analytical
How this is developed: During the seminars, the students will analyse industry datasets and confront the theory with the data.
Mode of assessment (if applicable): MCQ Assessment and Individual Report

Skills / attributes: Problem solving
How this is developed: During the lectures & seminars, the students will gather and synthesise information, compare different methodologies, and use their knowledge of programming, econometrics, and finance to solve problems.
Mode of assessment (if applicable): MCQ Assessment and Individual Report

Skills / attributes: Organization
How this is developed In lectures & seminars, the students will learn to manage their time carefully by prioritising and completing tasks within specific deadlines. They will also develop their organization skills by working on the individual project.
Mode of assessment (if applicable): Individual Report


Syllabus

 

• Portfolio choice
• The Capital Asset Pricing Model
• Test Methodology and empirical results
• Multifactor models of returns
• Efficient capital markets: Theory and Evidence


Recommended Texts

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