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Theory of Finance - ECO00040M

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  • Department: Economics and Related Studies
  • Module co-ordinator: Dr. Adam Golinski
  • Credit value: 20 credits
  • Credit level: M
  • Academic year of delivery: 2022-23
    • See module specification for other years: 2021-22

Module will run

Occurrence Teaching period
A Autumn Term 2022-23 to Spring Term 2022-23

Module aims

To provide a set of mathematical models and tools that can be used by those contemplating a career in finance or those considering doing further research in the subject.

To develop an intuitive understanding of key concepts of finance.

To present an overview of the topics that are the subject of modern finance.

To provide sufficient training in the methods of modern finance so that students can formulate and solve a diverse set of problems that arise in the study of finance.

To provide an opportunity for students to study, discuss and evaluate some research frontier dimensions of modern finance.

Module learning outcomes

On completing the module a student will be able to:

identify the major issues in the study of modern finance.

apply the methods taught in the module to solve specific problems in finance.

formulate a research proposal in finance.


Task Length % of module mark
Online Exam -less than 24hrs (Centrally scheduled)
Theory of Finance
3 hours 100

Special assessment rules



Task Length % of module mark
Online Exam -less than 24hrs (Centrally scheduled)
Theory of Finance
3 hours 100

Module feedback

Feedback will be available to students in line with University guidelines.

Indicative reading

The reading will consist mainly of lecture notes prepared by Professor Peter Spencer. Other readings will be drawn from the texts listed below. A number of articles will also be recommended in the lectures.

Basic Theory:
Cochrane, J.H., Asset Pricing, Princeton University Press, 2000.
Ingersoll, J.E., Theory of Financial Decision Making, Rowman and Littlefield, 1987.

Derivatives and Options:
Hull, J.C., Options, Futures and Other Derivatives, 4th Edition, Prentice Hall, 2000.
Cutherbertson, K., and Neitzshe, D., Financial Engineering: Derivatives and Risk Management, Wiley, 2001.

Other books that may be useful:
Campbell, J.Y., Lo, A.W., and MacKinlay, A.C., The Econometrics of Financial Markets, Princeton, 1997.
Duffie, D., Dynamic Asset Pricing Theory, Princeton, 2nd Edition, 1996.
Neftci, S. N., An Introduction to the Mathematics of Financial Derivatives, 2nd Edition, Academic Press, 2000.
Rebonato, R., Interest Rate Option Models, Wiley, 2nd Edition, 1998.

The information on this page is indicative of the module that is currently on offer. The University is constantly exploring ways to enhance and improve its degree programmes and therefore reserves the right to make variations to the content and method of delivery of modules, and to discontinue modules, if such action is reasonably considered to be necessary by the University. Where appropriate, the University will notify and consult with affected students in advance about any changes that are required in line with the University's policy on the Approval of Modifications to Existing Taught Programmes of Study.