Equity and Fixed Income
| Module title | Equity and Fixed Income |
|---|---|
| Module code | BEF3008 |
| Academic year | 2024/5 |
| Credits | 15 |
| Module staff |
| Duration: Term | 1 | 2 | 3 |
|---|---|---|---|
| Duration: Weeks | 11 |
| Number students taking module (anticipated) | 60 |
|---|
Module description
This module examines the characteristics, analysis and valuation of equity and fixed-income securities. You will have a sound understanding on a structural overview of financial markets and their operating characteristics. The module provides an overview of equity securities and their different features and establishes the background required to analyse and value equity securities in a global context. Various asset types, market participants, and how assets trade within these markets and ecosystems are presented. The module also covers an introduction to the fixed-income securities and their markets, yield measures, risk factors, and valuation measures and drivers. You will have an overview of industry and individual company analysis and illustrate approaches that are widely used by financial analysts to examine an industry.
Additional Information:
Internationalisation
Internationalisation is embedded in the content of this module. The principles of equity and fixed income are broadly common across most countries.
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
The aim of this module is to enhance your knowledge and understanding of analysis and valuation of equity and fixed-income securities. To this end, the module will cover advanced topics such as market indexes and market efficiency, industry and company analysis, equity valuation and tools, fixed-income securities, markets; elements, valuation, risks and return. Fundamentals of credit analysis will also be examined.
Intended Learning Outcomes (ILOs)
ILO: Module-specific skills
On successfully completing the module you will be able to...
- 1. Explain the main functions of the financial system and characteristics of a well-functioning financial system.
- 2. Describe and explain the Efficient Market Hypothesis and behavioural finance arguments.
- 3. Examine the role of equity securities in creating company value and the relationship between a companys cost of equity, its return on equity, and investors required rate of return.
- 4. Evaluate fixed-income securities and their markets, yield measures, risk factors, and valuation measures and drivers and calculate yields and values of fixed-income securities.
- 5. Explain benefits of securitisation for economies and financial markets.
- 6. -Describe basic principles of credit analysis and credit-related risks affecting corporate bonds.
ILO: Discipline-specific skills
On successfully completing the module you will be able to...
- 7. Apply asset-based valuation and demonstrate how these models can be used to estimate value.
- 8. Apply understanding of industry analysis and the relation of industry analysis to company analysis.
ILO: Personal and key skills
On successfully completing the module you will be able to...
- 9. Develop written communication skills in producing solutions to problems.
- 10. Work independently and develop effective and efficient self-study techniques.
Syllabus plan
- Market organisation and structure
- Security market indexes and market efficiency
- Overview of equity securities
- Introduction to industry and company analysis
- Equity valuation: concepts and basic tools
- Fixed-income securities: defining elements
- Fixed-income markets: issuance trading and funding
- Introduction to fixed-income valuation
- Introduction to asset-backed securities
- Understanding fixed-income risk and return
- Fundamentals of credit analysis
Learning activities and teaching methods (given in hours of study time)
| Scheduled Learning and Teaching Activities | Guided independent study | Placement / study abroad |
|---|---|---|
| 32 | 130 | 0 |
Details of learning activities and teaching methods
| Category | Hours of study time | Description |
|---|---|---|
| Scheduled Learning and Teaching | 20 | Lectures |
| Scheduled Learning and Teaching | 2 | Revision |
| Scheduled Learning and Teaching | 10 | Tutorials |
| Guided Independent Study | 130 | Reading, research; preparation for lectures, tutorials; preparation for assessments. |
Formative assessment
| Form of assessment | Size of the assessment (eg length / duration) | ILOs assessed | Feedback method |
|---|---|---|---|
| Weekly tutorial problems for discussions | 3 hours preparation by students/1 hour in class discussion | 1-10 | In class and suggested solutions on ELE |
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 |
|---|---|---|---|---|
| Assignment | 40 | 2000 words | 1-10 | Feedback comments during office hours as needed |
| Final exam | 60 | 2 hours | 1-10 | 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 |
|---|---|---|---|
| Applied exercise/Assignment (40%) | Applied exercise/Assignment (40% - 2000 words) | 1-10 | August re-assessment period |
| Final exam (60%) | Final exam (60%) (2 hours) | 1-10 | August re-assessment period |
Re-assessment notes
Defer – as first time
Refer – capped at 40%
Indicative learning resources - Basic reading
- Equity and Fixed-Income, CFA® Program Curriculum Level I Volume 5, CFA Institute.
- Barbara S. P. (2019) Fixed Income Analysis (CFA Institute Investment Series)
- K. Palepu, P. Healy, V. Bernard, and E. Peek (2022), Business Analysis and Valuation, IFRS edition (Third Edition), Cengage Learning Business Press.
| Credit value | 15 |
|---|---|
| Module ECTS | 7.5 |
| Module pre-requisites | None |
| Module co-requisites | None |
| NQF level (module) | 6 |
| Available as distance learning? | No |
| Last revision date | 05/03/2024 |
