Introduction to Finance

Module title	Introduction to Finance
Module code	BEE1006
Academic year	2024/5
Credits	15
Module staff	Dr Roshni Tara (Lecturer) Professor Julian Jamison (Lecturer) Dr Olha Matviiets (Convenor)

Duration: Term	1	2	3
Duration: Weeks	0	11	0

Number students taking module (anticipated)	374

Module description

Summary:

This module should appeal to students who wish to obtain a better understanding of financial markets and are interested in further study/career in finance. Topics covered include the role of stock and bond markets and the mechanics of investment, principles of investment, and the present value model of investment.

Additional Information:

Internationalisation

This is a highly practical module applicable across the globe. The tools (e.g., present value of cash flows) that are taught in this module can be used to evaluate investment opportunities anywhere in the world.

Sustainability

Lecture notes and other resources are available online on ELE (Exeter Learning Environment). The tools and analytical frameworks discussed in this framework are good starting points for students interested in green finance.

Employability

The skills students learn in this module are directly transferable to employment. Present value can be used to evaluate any type of investment (e.g., stock, bonds, or new projects). Through this module, students can also have better understandings of the financial markets (mainly bond and stock markets). These skills are relevant for jobs in corporate finance, consulting companies, investment banks and many other industries. This module also provides a good starting point for students interested in taking CFA Level I and CFA II exams.

Module aims - intentions of the module

The aim of this module is to provide an understanding of the functioning of financial markets and a foundation for your further study/career in finance. A theoretical framework is given to understand how individuals invest in financial markets and how to evaluate various investment opportunities (for example, US treasury bills, corporate bonds, and common stocks).

This module aims to get students acquainted with the basics of financial concepts and terminologies. This module would provide a good foundation for the students to pursue further studies or career in finance. For example, this module could be a good starting point for students to take CFA Level I and CFA II exams. Also, the concepts and ways of thinking discussed in this module may help students make better financial decisions in the future.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

1. demonstrate a basic understanding of stock and bond markets and various financial institutions;
2. demonstrate an ability to evaluate investment opportunities using the present value framework.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

3. demonstrate a basic understanding of stock and bond markets and various financial institutions;

ILO: Personal and key skills

On successfully completing the module you will be able to...

4. demonstrate analytical and problem-solving skills;
5. demonstrate good learning approaches and habits in online/hybrid learning environments.

Syllabus plan

This module will cover the following topics:

The Corporation (Ch.1 of Berk and DeMarzo)
Introduction to Financial Statement Analysis (Ch.2 of Berk and DeMarzo)
Financial Decision Making and the Law of One Price (Ch.3 of Berk and DeMarzo)
Discounted Cash Flow Valuation (Ch.4 and Ch.5 of Berk and DeMarzo)
Bond Valuation (Ch.6 of Berk and DeMarzo)
Investment Decision Rules (Ch.7 of Berk and DeMarzo)
Stock Valuation (Ch.9 of Berk and DeMarzo)

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching Activities	Guided independent study	Placement / study abroad
22	128	0

Details of learning activities and teaching methods

Category	Hours of study time	Description
Learning and Teaching Activity	22	Lectures
Guided Independent Study	60	Revision of the contents covered in the lectures
Guided Independent Study	12	Review the practice problems discussed in the lecture
Guided Independent Study	24	Undertake assignment and later review the feedback and solutions
Guided Independent Study	10	Weekly problem sets and reviewing the solutions of them
Guided Independent Study	22	Prepare for exams

Formative assessment

Form of assessment	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Exercises	Weekly	1-5	Seminar discussions

Summative assessment (% of credit)

Coursework	Written exams	Practical exams
0	100	0

Details of summative assessment

Form of assessment	% of credit	Size of the assessment (eg length / duration)	ILOs assessed	Feedback method
Mid-Term Examination	30	1.5 hours	1-5	Written or oral feedback
Final Examination	70	2 hours	1-5	Written or oral feedback

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
Mid-Term Examination (30%)	Examination (1.5 hours, 30%)	1-5	Referral/Deferral period
Final Examination (70%)	Examination (2 hours, 70%)	1-5	Referral/Deferral period

Re-assessment notes

Deferral – if you have been deferred for any assessment you will be expected to submit the relevant assessment. The mark given for a re-assessment taken as a result of deferral will not be capped and will be treated as it would be if it were your first attempt at the assessment.

Referral – if you have failed the module overall (i.e. a final overall module mark of less than 40%) you will be expected to submit the relevant assessment. The mark given for a re-assessment taken as a result of referral will be capped at 40%

Indicative learning resources - Basic reading

Core text:

Berk, J. B., & DeMarzo, P. M. (2020) Corporate Finance (5^thedition): Global Edition. Pearson Education.
ISBN: 9781292304151

Access through the University’s Library: https://encore.exeter.ac.uk/iii/encore/record/C__Rb4347575__SCorporate%20Finance__Orightresult__U__X7?lang=eng&suite=cobalt

Indicative learning resources - Other resources

Further readings (if interested):

Financial Accounting:

Libby, R., Libby, P., & Hodge, F. (2020) Financial Accounting (10^th edition). McGraw-Hill.

Financial Statement analysis and evaluation:

Penman, S. (2013) Financial Statement analysis and evaluation (5^th edition). McGraw-Hill.

Investment:

Bodie, Z., Kane, A., & Marcus, A. (2018) Investments (11^th edition). McGraw-Hill.

CFA textbooks:

CFA Program Curriculum 2020 Level I Volumes 1-6 Box Set

Link form the University’s library: http://encore.exeter.ac.uk/iii/encore/record/C__Rb4232925__SCFA__Orightresult__U__X6?lang=eng&suite=cobalt

CFA Program Curriculum 2020 Level II Volumes 1-6 Box Set

Link form the University’s library: http://encore.exeter.ac.uk/iii/encore/record/C__Rb4232926__SCFA__Orightresult__U__X6?lang=eng&suite=cobalt

CFA Program Curriculum 2019 Level III Volumes 1-6 Box Set

Link form the University’s library: http://encore.exeter.ac.uk/iii/encore/record/C__Rb3991323__SCFA__Orightresult__U__X6?lang=eng&suite=cobalt

Key words search

Finance, Corporate Finance, Markets, Interest Rates, Bonds, Stocks.

Credit value	15
Module ECTS	7.5
Module pre-requisites	None
Module co-requisites	None
NQF level (module)	4
Available as distance learning?	No
Origin date	01/09/1999
Last revision date	26/09/2023