Latest Module Specifications
Current Academic Year 2025 - 2026
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Description 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Learning Outcomes 1. 1D646C7C-F390-0001-DBC5-9750DC90DF80 2. describe and use fundamental principles and concepts in finance 5. 1 6. 1D646C7C-8500-0001-D6DD-B2036A00CA00 7. appraise the relationship between risk and return 10. 2 11. 1D646C7C-B6FF-0001-4E8F-14F71985A060 12. examine the pricing of assets 15. 3 16. 1D646C7C-C683-0001-1AD3-C18A17CB84B0 17. use key skills in financial decision making 20. 4 21. 1D646C7C-DDF3-0001-4B19-11008D0D11E0 22. critically assess financial theories and models 25. 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 |
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Indicative Content and Learning Activities
Introduction Investment Environment; Risk, Return and the Historical Record; Investment Horizon; Asset Classes and Financial Instruments; Risk, Return and the Historical Record Capital Allocation to Risky Assets Capital Allocation to Risky Assets; Utility and the Investment Decision; Risk Premium and Risk Aversion; Utility and Risk Aversion; Portfolios of One Risky Asset and a Risk-Free Asset; Risk Tolerance and Asset Allocation; Capital Market Line (CML)' Optimal Risky Portfolios Diversification and Portfolio Risk; Portfolios of two risky assets; Asset Allocation; Markowitz Portfolio Optimisation Model; The Power of Diversification Index Models and Capital Asset Pricing Model (CAPM) Single Index Model; Estimation of the SIM; Index Model and Portfolios; Capital Asset Pricing Model; CAPM Assumptions Revisited; Testing CAPM; Roll’s Critique and Testing CAPM Arbitrage Pricing Theory and Multifactor Models Multifactor Models; Arbitrage Pricing Theory; The APT and the CAPM; A Multifactor APT; The Fama-French (FF) Three-Factor Model; The Fama-French (FF) Five-Factor Model; Factor Zoo The Efficient Market Hypothesis Random Walks; Three Versions of EMH; Implications of EMH Behavioural Finance and Technical Analysis The Behavioural Critique; Technical Analysis Equity Valuation Models Intrinsic Value versus Market Value; Dividend Discount Model | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List Books:
Articles: None | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Resources None | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||