| Unit name | Asset Pricing |
|---|---|
| Unit code | ACFIM0026 |
| Credit points | 20 |
| Level of study | M/7 |
| Teaching block(s) |
Teaching Block 1 (weeks 1 - 12) |
| Unit director | Professor. Stoja |
| Open unit status | Not open |
| Units you must take before you take this one (pre-requisite units) |
None |
| Units you must take alongside this one (co-requisite units) |
None |
| Units you may not take alongside this one |
None |
| School/department | School of Accounting and Finance - Business School |
| Faculty | Faculty of Social Sciences and Law |
Why is this unit important?
A long time ago Oscar Wilde said “A cynic is a man who knows the price of everything, and the value of nothing.” Ever since, economists – perhaps the ultimate cynics since they study the dismal science – have tried to address this critique and reconcile the two. This is also what we will concern ourselves with in the Asset Pricing unit: we know the price of any financial asset since we can observe it in the financial markets but do not know its value. How do we make sure the price of assets is equal to its value? This is very important - wouldn’t you want to ensure that the price you pay for a house does not exceed its value? However, it is considerably more difficult than what it might first seem. We start with the fundamental theorem of asset pricing – a simple relation stating that the price of an asset equals the present value of future cash generated by the asset – decompose it in various ways and discover a surprisingly rich array of properties and insights that will allow us to get close to the answer of the question that has concerned economists for decades. This is paramount because it is the foundation for many other units in TB1 and TB2.
How does this unit fit into your programme of study
This unit covers a range of ground-breaking ideas and concepts on which modern finance is built and are essential knowledge to be able to answer important questions in finance such as valuing assets, constructing portfolios, measuring fund performance that are covered in TB1 and TB2 units such as Quantitative Methods for Finance and Investment, Investment Management and Financial Modelling. Students will learn practical applications of the financial models and ideas in Excel, a spreadsheet package that is widely used in the industry and is very versatile and helpful. The students will also learn how to critically evaluate and analyse finance material such as academic research, company information or even articles in the financial press. As such, the unit will provide them with the skills they need to be able to understand the research literature, choose the most appropriate methods for a given type of problem, and conduct straightforward economic analysis when undertaking the investigative part of their dissertations.
An overview of content
The Asset Pricing course provides a thorough grounding in the pricing of financial securities. The lectures start with a discussion of interest rates before moving on to bond pricing. Equity markets and determination of equity prices are treated next before the theory behind and testing procedures for informational efficiency in financial markets are discussed. Finally, derivative securities and derivatives pricing are treated in detail.
How will students, personally, be different as a result of the unit
Students will gain confidence in both examining and analysing financial problems using insights gained throughout the course and critically evaluate statements and claims made by financial companies, press and by academics. They will also develop applied problem-solving skills, being able to break down a problem to examine the fundamental issues at its heart. They will develop industry skills in handling and analysis of financial data and will develop their analytical thinking and problem-solving abilities.
Intended Learning Outcomes
This unit aims to give students the ability to derive and compare modern asset pricing paradigms, along with the ability to critically evaluate them via an understanding of the results of empirical work in the field. Having successfully completed this unit students will be able to:
How you will learn
Teaching will be delivered through a combination of sessions including lectures, exercise lectures, golden hours, discussion boards and other online learning resources.
Tasks which help you learn and prepare you for summative tasks (formative):
Formative assessment will be based on topics covered and will be made available on Blackboard. For each chapter, there will be 10 multiple-choice questions which students should aim to answer after digesting the teaching material, especially the allocated reading. Students should aim to complete each assignment within a week of its release. Students can attempt each assignment as many times as they like. The feedback on their performance is provided at completion so that students can self-assess their understanding of the material and identify points requiring further study.
Tasks which count towards your unit mark (summative):
Comprehensive 100% exam 2 hours in duration which covers intended learning outcomes: LO1, LO2, LO3, LO4 and LO5.
When assessment does not go to plan
When a student fails the unit and is eligible to resubmit, failed components will be reassessed on a like-for-like basis.
If this unit has a Resource List, you will normally find a link to it in the Blackboard area for the unit. Sometimes there will be a separate link for each weekly topic.
If you are unable to access a list through Blackboard, you can also find it via the Resource Lists homepage. Search for the list by the unit name or code (e.g. ACFIM0026).
How much time the unit requires
Each credit equates to 10 hours of total student input. For example a 20 credit unit will take you 200 hours
of study to complete. Your total learning time is made up of contact time, directed learning tasks,
independent learning and assessment activity.
See the University Workload statement relating to this unit for more information.
Assessment
The assessment methods listed in this unit specification are designed to enable students to demonstrate the named learning outcomes (LOs). Where a disability prevents a student from undertaking a specific method of assessment, schools will make reasonable adjustments to support a student to demonstrate the LO by an alternative method or with additional resources.
The Board of Examiners will consider all cases where students have failed or not completed the assessments required for credit.
The Board considers each student's outcomes across all the units which contribute to each year's programme of study. For appropriate assessments, if you have self-certificated your absence, you will normally be required to complete it the next time it runs (for assessments at the end of TB1 and TB2 this is usually in the next re-assessment period).
The Board of Examiners will take into account any exceptional circumstances and operates
within the Regulations and Code of Practice for Taught Programmes.
