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MODULE SPECIFICATION TEMPLATE
MODULE DETAILS
Module title
Finance & Risk Management
Module code
FN 282
Level
Level 4
Level 5
Level 6
Level 7
Credit rating
20
Pre-requisites for
registration on this module
FN 142 – Financial Skills
FN 162 – Finance
eventually it is anticipated that these
will be specified in terms of learning
outcomes; in the interim they should
be specified in terms of other
module codes, or equivalent
Type of module
20 credit year-through module
Period of time over which it is
delivered and mode of delivery
Brief description of
module content and/ or
aims
Overview (max 80 words)
The module is aimed at students on specialised finance degrees. It is
designed to focus on financial management primarily in terms of those
issues affecting corporate financial managers. In particular, the areas
covered include an appreciation of financial risk management, the use
of derivatives, the valuation of options, an analysis of stock market
behaviour, capital structure and investment decisions, and dividend
decisions.
Module team/ author/
coordinator(s)
Anastasia Khanina
Semester 1 or 2
1 through 2
Site/ campus where
delivered
Moulsecoomb
Field(s) for which module is appropriate and status in that field
Field
Status (mandatory/ compulsory/ optional)
Course(s) for which module is appropriate and status on that course
Course
Status (mandatory/ compulsory/ optional)
BSc (Hons) Finance and Investment
Compulsory
Template updated: June 2011
MODULE AIMS, ASSESSMENT AND SUPPORT
Aims
To investigate the nature of financial risks that corporations are
exposed to and how to decide whether or not to manage those risks.
To understand the way that derivatives can be used to manage
financial risks and be able to apply this knowledge.
To appreciate the factors that affect the value of traded and real
options and be able to apply appropriate option valuation techniques.
To further examine the financial environments in which financial
decision making takes place.
To develop a critical awareness of the relationship between financing
and investment and of the theoretical and practical problems
associated with financing, investment and distribution decisions.
Learning outcomes/
objectives
On successful completion of the module, students will be able to:
Subject Specific
Demonstrate an understanding of the processes involved in planning
and managing the financial resources of organisations to ensure that
value is maintained and increased.
Demonstrate an understanding of the concepts and theories and their
implications for those involved in the financial management of
organisations.
Evaluate, understand and apply sophisticated financial techniques to
real world problems of resourcing and investment.
Cognitive
Become more critical and analytical in thinking, and to recognise
where the particular skills or ideas learned on the course may be
relevant to solving a new problem.
Analyse and draw reasoned conclusions concerning structured and, to
a more limited extent, unstructured problems from a given set of data
which must be acquired by the student.
Locate, extract and analyse data from multiple sources, including the
acknowledgement and referencing of sources.
Demonstrate numeracy skills, including the ability to manipulate
financial and other numerical data and appreciate the statistical
concepts at an appropriate level.
Demonstrate skills in the use of communications and information
technology, in particular, the use of spreadsheets, word processing
software and on-line databases.
Content
Template updated: June 2011
Treasury and risk management: Role of the treasury function.
Identifying and measuring risk. Financial risk: Interest rate risk,
currency risk and credit/default risk. Internal v external hedging
techniques.
The use of financial derivatives in risk management: futures, options
and swaps. Operations of futures and options markets. Applications of
derivatives to currency and interest rate risk.
Option valuation techniques and the identification and valuation of real
options.
Further examination of the workings of the financial markets especially
the findings related to behavioural aspects.
A critical analysis of CAPM. Alternative pricing models including
Arbitrage Pricing Theory.
Capital structure: An appraisal of M&M and alternative theories.
Empirical evidence on capital structure. How to adjust the cost of
capital for investment decisions. Adjusted present value.
Dividend policy: theory and practice taking into account dividend
reinvestment plans and share repurchases.
Business reorganisation: mergers, acquisitions and divestments.
Theories and motives for business reorganisations. Financing,
defence tactics, winners and losers. Agency aspects of takeover
activity. Valuation of companies.
Teaching and learning
strategy
Allocation of study hours to activities
(including pre-module activities,
contact time, private study time and
assessment)
The module will use a mix of lectures and seminars, some of which
will require group discussion, some will take the form of practical
workshops and some will be used for formative assessment. In
addition, students will be expected to read prior to each lecture and
seminar, and prepare answers to all seminar based questions. They
will be expected to plan their study and revision time.
Lectures:
20
Open Learning:
0
Seminars:
20
Self Study:
160
Workshops:
0
Total:
200
Learning support
Indicative reading (The latest editions of):
Including indicative reading,
computer packages, field trips etc
Arnold, G., Corporate Financial Management, Prentice Hall
Berk, J. & DeMarzo, P., Corporate Finance, Addison Wesley
Brealey, R.A., Myers, S.C. & Allen, F., Principles of Corporate
Finance, McGraw Hill
Hull, J., Fundamentals of Futures & Options, Prentice Hall
Lumby, S. & Jones, C., Investment Appraisal and Financial Decisions,
Thomson Business Press
Ross, S., Westerfield, R. & Jaffe,J., Corporate Finance, McGraw Hill
Rutterford, J., Financial Strategy, Wiley
Stern, J.M. & Chew, D., The Revolution in Corporate Finance,
Blackwells
Template updated: June 2011
Assessment tasks
Including weighting of individual
tasks
Coursework (30%): a research based project of up to 3000 words
where students will have to utilise text, internet and other
electronically based data and apply it to a topical issue within
the subject area.
Examination (70%): An unseen 3-hour exam that will test the student’s
ability to critically evaluate current theory and solve complex
problems
EXAMINATION INFORMATION
Area examination board
Finance
External examiners
Name
Date appointed
Dr Bode Akinwande.
QUALITY ASSURANCE
Date of first approval
2007
Only complete where this is not the
first version
Date of last revision
2009
Only complete where this is not the
first version
Date of approval for this
version
March 2012
Version number
2
Modules replaced
Specify codes of modules for which
this is a replacement
Template updated: June 2011