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MPhil in Finance and Economics - Optional Modules

Optional Modules

  • F500 : Empirical Finance

    This course is an introduction to some major topics in empirical finance. It aims to endow the student with an understanding of the current issues, methods, and conclusions of empirical research on financial markets. The focus is primarily on equity markets. There will be an emphasis on empirical results and their interpretation. Econometrics required background.

  • F510 : International Finance

    The aim of the course is to introduce students to classical and emerging issues in international finance, covering both modelling and empirical issues. Topics include international financial integration, risk and international arbitrage, carry trade, micro-structure of foreign exchange market, currency crises and contagion, sovereign risk, default and international borrowing.

  • F520 : Behavioural Finance

    In this course we examine how the insights of Behavioural Finance complements the traditional paradigm and sheds light on the behaviour of asset prices, corporate finance, and various Wall Street institutions and practices. Behavioural Finance combines behavioural and cognitive psychological theory with conventional finance to provide understanding how people make financial decisions. It represents a collection of different approaches which seek to explain the existing findings and puzzles. This typically involves relaxing the assumption of fully informed and rational agents.

    We start by briefly reviewing the efficient markets hypothesis, rational choice and expected utility theory. We will aim to understand observed deviations from the predictions of the efficient market hypothesis with the goal of providing better insights into the functioning of financial markets. We will consider alternative models of decision making, in particular Prospect Theory and the distinction between risk and Knightian uncertainty. We will then consider evidence from psychology on the biases that arise in individual decision-making and in particular the role of herding and investor sentiment. We review recent research on limits to arbitrage.

  • F530 : Venture Capital in the Innovation Economy

    The course explores the political and economic context from which professional venture capital has evolved and evaluates the distribution and correlates of investment returns to venture capital. Lectures explore the historic role of technological innovation in driving economic development and the complementary contributions of the state and of financial speculation to mobilizing resources for investment in the development and deployment of innovative technologies.

  • F540 : Topics in Applied Asset Management

    This course will provide a detailed understanding of the main issues in applied portfolio design and related topics in practical asset management and risk management. We first consider how to overcome the problems with the use of mean variance methods, which are industry standard. A range of alternative modern approaches will then be discussed. We will examine the role of the predictability in both expected returns and volatility for position sizing, the use of leverage, managing risk through vol targeting, directional prediction, volatility timing, the use of quantile and expectile regression methods and finally the importance of recognising regimes of predictability. The practical focus will be on equity markets but we will also consider FX and futures markets while studying carry and momentum strategies to some degree.

  • E101 : Applied Microeconomics

    The focus of this course is on using both theory and data to answer interesting and policy-relevant questions in applied microeconomics. The questions are drawn from topics in applied microeconomics, including research in taxation, social insurance, and labour markets. The focus is on individual behaviour and the role of government. The course aims to provide a framework on individual behaviour that can be used to think about the effects of policy, to use that framework to analyse the effects of taxation and social insurance, and to provide the empirical tools to relate that framework to what is observed in the data.
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  • E200 : Principles of Macroeconomics I

    This course covers key models that help to analyse and explain macroeconomic phenomena. It investigates economic growth, business cycles, consumption, investment, unemployment, rigidities, fiscal and monetary policy, and exchange rates.
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  • E201 : Applied Macroeconomics

    The aim of this course is twofold: First, it will introduce students to structural VARs, and related the concept of structural to identification more broadly. In addition, the students will obtain the computational tools to analyse structural VARs themselves using mathematical softwares (primarily Matlab). Second, the course will go through applied macroeconomic theory and analyse the effects on monetary and fiscal policy, and how the policy effectiveness are altered when the economy is in a liquidity trap.
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  • S140 : Behavioural Economics

    This course offers an introduction to the behavioural approach to economics. Among the topic covered are behavioural game theory, intertemporal decision making, neuroeconomics, cognitive biases, decision-making heuristics and addiction. The course includes both theoretical and empirical material, but a recurring theme is the importance of experimental findings both in the laboratory and in the field.

  • S150 : Economics of Networks

    Our choices and behaviour are shaped by whom we interact with. The choices of our friends are in turn shaped by their friends, whose choices are in turn influenced by their friends, and so on. Thus an individual’s choices are shaped by the overall network of relationships which obtain. Moreover, rational individuals who realize these effects have an incentive to make investments and create networks that are advantageous to themselves. In the last decade, these ideas have led to a burst of theoretical and empirical research on the economics of networks. The aim of this course is to provide a rigorous introduction to this body of research.

  • S301 : Applied Econometrics

    This course has two components (i) empirical strategies for obtaining causal estimates, including randomized experiments, difference-in-difference, regression discontinuity, selection correction and instrumental variables and (ii) panel data estimation including fixed and random effects and dynamic panel data models. The focus is on empirical rather than purely theoretical issues.