Lancaster University

This half-unit course can only be taken by students who completed AcF 100/263. It aims to provide a basic understanding of fundamental theories and techniques in finance that are of concern to all those involved in making financial decisions. These include:

<!--[if !supportLists]-->§ <!--[endif]-->Capital investment appraisal techniques

<!--[if !supportLists]-->§ <!--[endif]-->The theory of risk, return and the cost of capital, to include portfolio theory and the capital asset pricing model (CAPM)

<!--[if !supportLists]-->§ <!--[endif]-->The efficient markets hypothesis (EMH) and an introduction to behavioural finance

<!--[if !supportLists]-->§ <!--[endif]-->Payout policy

<!--[if !supportLists]-->§ <!--[endif]-->Capital structure

<!--[if !supportLists]-->§ <!--[endif]-->Introduction to option pricing theory

<!--[if !supportLists]-->§ <!--[endif]-->Working capital management

<!--[if !supportLists]-->§ <!--[endif]-->Assess investment projects using capital budgeting techniques, and understand the problems associated with applying such techniques in practice;

<!--[if !supportLists]-->§ <!--[endif]-->Understand the relationship between risk and required return;

<!--[if !supportLists]-->§ <!--[endif]-->Understand the concept and practical implications of market efficiency; be able to provide a number of rational and behavioural explanations of selected market anomalies;

<!--[if !supportLists]-->§ <!--[endif]-->Understand the determinants of payout policy;

<!--[if !supportLists]-->§ <!--[endif]-->Understand the determinants of capital structure choice;

<!--[if !supportLists]-->§ <!--[endif]-->Understand payoffs of simple options, understand the binomial option pricing model, and have introductory knowledge of the Black & Scholes option pricing model; be able to apply basic option pricing techniques in the context of corporate finance and capital investment decisions

<!--[if !supportLists]-->§ <!--[endif]-->Understand and be able to quantify basic trade-offs occurring in working capital management