The objective of the first part of the module is to provide students with an overview of the main principles of corporate finance. Understanding of corporate valuations and financial accounting including examine of equity finance, and other the tools used for financing investment. The second part of the module is divided into three main parts. In part one, the module introduces the fundamental concepts of financial markets and financial valuations. The fundamental concept behind asset pricing is that: price equals expected discounted payoff. This basic idea is developed in the second part of the module, which is dedicated to asset pricing theory (Discount Factors and Risk Premiums, Consumption-based model overview and Factor Pricing Models: C-CAPM) and its applications. The module covers most of the standard products such as equities, government bonds, derivative securities (futures, forwards and options), credit, and securitised products. Lastly, the third part examines the evaluation of asset pricing models and its implications. In particular, we will look at portfolio theory and new asset pricing models: those in continuous time and those Consumption-based.

Learning Outcomes

Knowledge of the concepts of corporate finance
	Measure and value capital, including fixed capital, working capital and intangibles
	Concrete understanding of the concept of asset pricing
	Knowledge of the various standard theoretical tools in asset pricing: stochastic discount factor, no-arbitrage, factor pricing models (C-CAPM), complete markets, equilibrium asset pricing, beta pricing models, risk neutral valuations, contingent claims, mean variance analysis, intertemporal asset pricing, conditional asset pricing, and modern portfolio theory
	The ability to work with models describing stocks, bonds, options, and real investments
	Familiarity with tools to determine price or value of claims to uncertain payments
	Understanding of mean-variance portfolio analysis, utility and expected return, risk aversion, and portfolio choice
	Ability to apply consumption/investment problems and their asset pricing implications