Quantitative Methods
| Module title | Quantitative Methods |
|---|---|
| Module code | BEF2015 |
| Academic year | 2024/5 |
| Credits | 30 |
| Module staff |
| Duration: Term | 1 | 2 | 3 |
|---|---|---|---|
| Duration: Weeks | 11 | 11 |
| Number students taking module (anticipated) | 60 |
|---|
Module description
This module provides sound knowledge in the quantitative concepts and applications that are fundamental to financial analysis. It introduces quantitative methods that are used widely in securities and risk analysis and in corporate finance to value capital projects and select investments. This module provides you with a foundation in descriptive statistics which provide the tools to characterise and assess risk and return and other important financial or economic variables. It introduces the fundamental quantitative techniques that are essential for a financial analyst, such as basic statistics, probability theory and regression analysis that support investment and risk decision making in the presence of uncertainty. You will also be introduced to a range of techniques that underlie how financial technology is affecting areas within the investment industry, such as investment analysis, automated advice, and risk management.
Additional Information:
Internationalisation
The content of this module is relevant across countries as it is based on mathematical and statistical models.
Sustainability
All of the other resources for this module are available on the ELE (Exeter Learning Environment).
Employability
In this module students will learn skills that are transferable and relevant for jobs in investment banks, corporate finance and many other industries. This module also provides a good foundation for students interested in taking CFA level I exam.
Module aims - intentions of the module
This module provides you with a foundation in mathematics and descriptive statistics which provide the tools to characterise and assess risk and return and other important financial or economic variables. The first half of the module provides you with a solid foundation in mathematics for finance and investments. Topics covered include functions and operations, solving simultaneous linear equations, differential calculus and introduction to matrix algebra. The second half of the module introduces the fundamental quantitative techniques that are essential for a financial analyst, such as probability and statistics, hypothesis testing and regression analysis. Elements of portfolio and options mathematics, and techniques of big data will also be examined.
Intended Learning Outcomes (ILOs)
ILO: Module-specific skills
On successfully completing the module you will be able to...
- 1. Apply knowledge and understanding of the key mathematical concepts needed for the quantitative analysis within a finance context
- 2. Apply knowledge and understanding of various statistical methods which are used to investigate financial data
- 3. Apply quantitative techniques within a finance context to solve problems and make decisions
- 4. Interpret financial data and carry out statistical and financial analysis
- 5. Describe aspects of fintech that are relevant for the gathering and analysing of financial data
ILO: Discipline-specific skills
On successfully completing the module you will be able to...
- 6. Apply quantitative methods used in finance to assess risk and return and other important financial or economic variables
- 7. Application of the quantitative techniques learnt in all areas of your day-to-day activities
ILO: Personal and key skills
On successfully completing the module you will be able to...
- 8. Apply written communication, technical, analytical and problem-solving skills
- 9. Undertake independent study and manage own time
Syllabus plan
- Functions and operations
- Algebra and solving equations
- Elements of matrix mathematics
- Differential calculus
- Return, Risk and Co-movement
- Statistical concepts
- Probability distributions
- Bayesian Analysis
- Hypothesis testing and confidence intervals
- Linear Regression Analysis
- Multiple linear regression
- Time series models
- Time Value of Money in Finance
- Portfolio mathematics
- Elements of options mathematics
- Introduction to big data techniques
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 58 | 244 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled Learning and Teaching | 36 | Lectures |
| Scheduled Learning and Teaching | 4 | Revision |
| Scheduled Learning and Teaching | 18 | Tutorials |
| Guided Independent Study | 244 | Reading, question practice and assessment preparation preparation |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Tutorial questions | In class | 1-9 | In class feedback |
Summative assessment (% of credit)
| Coursework | Written exams | Practical exams |
|---|---|---|
| 40 | 60 | 0 |
Details of summative assessment
| Form of assessment | % of credit | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|---|
| In-class test (term 1) | 20 | 1 hour | 1-9 | Mark awarded and suggested solutions |
| Assignment (term 2) | 40 | 2000 words | 1-9 | Feedback comments during office hours as needed |
| Final exam (term 2) | 40 | 2 hours | 1-9 | Suggested solutions; students will be offered opportunity to view scripts |
Details of re-assessment (where required by referral or deferral)
| Original form of assessment | Form of re-assessment | ILOs re-assessed | Timescale for re-assessment |
|---|---|---|---|
| In class test (term 1, 20%) | In class test (1 hour, 20%) | 1-9 | August/September re-assessment period |
| Assignment (term 2, 40%) | Assignment (2000 words, 40%) | 1-9 | August/September re-assessment period |
| Final exam (term 2, 40%) | Final exam (40%, 2 hours) | 1-9 | August/September re-assessment period |
Re-assessment notes
Defer - as first time
Refer - capped at 40%
Indicative learning resources - Basic reading
Basic reading:
- Teall, J. and Hasan I. (2002) Quantitative Methods for Finance and Investments. London: Blackwell Publishing.
- Miller, M. B (2013). Mathematics and Statistics for Financial Risk Management, Wiley Finance.
- Quantitative Methods, CFA® Program Curriculum Level I Volume I, CFA Institute. (2024)
Other reading (if interested):
- Alexander, C (2008) Market Risk Analysis, Quantitative Methods in Finance (The Wiley Finance Series)
- Cox D, and Cox M 2006) The Mathematics of Banking and Finance: 329 (The Wiley Finance Series)
- Swift, L. and Piff, S. (2014) Quantitative Methods for Business, Management & Finance. Basingstoke: Palgrave Macmillan.
- Wisniewski, M (2019). Quantitative Methods for Decision Makers. Harlow: Pearson Education.
| Credit value | 30 |
|---|---|
| Module ECTS | 15 |
| Module pre-requisites | None |
| Module co-requisites | None |
| NQF level (module) | 5 |
| Available as distance learning? | No |
| Origin date | 25/03/2024 |
| Last revision date | 25/03/2024 |