Principles of Asset Pricing - MAN00100M
Module will run
| Occurrence | Teaching period |
|---|---|
| A | Online Teaching Period 2 2022-23 |
| B | Online Teaching Period 6 2022-23 |
Module aims
This module aims to provide students with the basics of the neoclassical theory of asset pricing. At the heart of this approach lies the no-arbitrage principle. Topics to be discussed are:
- The basics of modelling risk and return
- The capital asset pricing model
- Arbitrage pricing theory
- Efficient markets: theory and evidence
- The term structure of interest rates and bond yields
- Option markets and valuation
- Behavioural finance
Module learning outcomes
Academic and graduate skills
Successful completion of the module will demonstrate that students are able to:
- Describe and apply the CAPM to value assets;
- Describe and apply the principles of bond valuation;
- Describe and apply the contingent claim approach to option pricing;
- Explain the effect of some cognitive biases on investor behaviour.
Indicative assessment
| Task | % of module mark |
|---|---|
| Open Exam (2 days) | 40 |
| Open Exam (2 days) | 60 |
Special assessment rules
None
Indicative reassessment
| Task | % of module mark |
|---|---|
| Open Exam (2 days) | 100 |
Module feedback
Students will receive regular feedback on formative weekly activities and on the formative assessment. They will also receive a feedback sheet with detailed comments on the summative assessment explaining how they performed in relation to the assessment criteria. Turnaround time for summative assessment is 4 weeks. At the end of term, the module leader will develop a report about the module and the students’ performance which, once approved by the Board of Exams, will be uploaded onto VLE and made accessible to students.
Indicative reading
Bodie, Z., Kane, A. and Marcus, A. (2011), Investments, McGraw-Hill/Irwin, latest edition