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Module Specifications..

Current Academic Year 2023 - 2024

Please note that this information is subject to change.

Module Title Financial Theory
Module Code EF306
School DCUBS
Module Co-ordinatorSemester 1: Claire Kearney
Semester 2: Claire Kearney
Autumn: Claire Kearney
Module TeachersClaire Kearney
Mahdavi Ardekani Seyed Aref
NFQ level 8 Credit Rating 5
Pre-requisite None
Co-requisite None
Compatibles None
Incompatibles None

The aim of this course is to provide students with a thorough foundation in the principles of financial theory and to develop a critical approach to the discipline. This starts with utility theory and risk-return relationship with different risk measures. Students will develop an understanding of portfolio diversification leading to the development of the Capital Asset Pricing Model as well as an investigation of the arbitrage prcing theory. Students will also explore the more recent developments including the development of the Fama-French three factor model and behavioural finance.

Learning Outcomes

1. describe and use fundamental principles and concepts in finance
2. appraise the relationship between risk and return
3. examine the pricing of assets
4. use key skills in financial decision making
5. critically assess financial theories and models

Workload Full-time hours per semester
Type Hours Description
Lecture24No Description
Independent Study24Assigned readings
Independent Study24Problem sets
Assignment Completion13Preparing for Individual Assignment Case Study
Independent Study40Exam preparation
Total Workload: 125

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

Utility theory
Basic axioms of utility theory, indifference curves, certainty equivalents, risk-reward trade-off and the concept of risk aversion.

State Preference Theory
Optimal portfolio decisions, portfolio optimality conditions and Fisher Separation.

Mean-Variance uncertainty
Measuring risk and return for a single asset and portfolio of assets. Optimal portfolio choice with risky assets and the risk-free rate of interest.

Asset Pricing
Capital Asset Pricing Model and Arbitrage Pricing Theory. Efficiency of the market portfolio, Beta, systematic and unsystematic risk. Behavioural Finance

Efficient Capital Market Theory
Random walk model, categories of efficiency, empirical review, Behavioral Finance , technical analysis.

Assessment Breakdown
Continuous Assessment30% Examination Weight70%
Course Work Breakdown
TypeDescription% of totalAssessment Date
AssignmentIndividual Assignment - Case Study30%Week 7
Reassessment Requirement Type
Resit arrangements are explained by the following categories;
1 = A resit is available for all components of the module
2 = No resit is available for 100% continuous assessment module
3 = No resit is available for the continuous assessment component
This module is category 1
Indicative Reading List

  • Bodie, Z., A. Kane and A. Marcus: 2008, Investments, 7th edition, Irwin McGrawHill, 978-007-126310-8
Other Resources

Programme or List of Programmes
AFBA in Accounting and Finance
AFUAge Friendly University Programme
BSBachelor of Business Studies
BSEBachelor of Business Studies (Exchange)
BSIBusiness Studies ( with INTRA )
BSSAStudy Abroad (DCU Business School)
BSSAOStudy Abroad (DCU Business School)
EBBA in Global Business
EBCBA in Global Business (Canada)
EBFBA in Global Business (France)
EBGBA in Global Business (Germany)
EBSBA in Global Business (Spain)
EBTBA in Global Business (USA)
ECSAOStudy Abroad (Engineering & Computing)
EPLBA in Economics, Politics and Law
EPLNBA in Economics, Politics and Law
EPLYABA in Economics, Politics and Law (Int)
HMSAStudy Abroad (Humanities & Soc Science)
HMSAOStudy Abroad (Humanities & Soc Science)
INTBBachelor Business Studies International
SHSAStudy Abroad (Science & Health)
SHSAOStudy Abroad (Science & Health)
Date of Last Revision26-JAN-12

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