Registry
Module Specifications
Archived Version 2014 - 2015
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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. 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 | |||||||||||||||||||||||||||||||||||||||||
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 Utility theoryBasic axioms of utility theory, indifference curves, certainty equivalents, risk-reward trade-off and the concept of risk aversion.State Preference TheoryOptimal portfolio decisions, portfolio optimality conditions and Fisher Separation.Mean-Variance uncertaintyMeasuring 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 PricingCapital Asset Pricing Model and Arbitrage Pricing Theory. Efficiency of the market portfolio, Beta, systematic and unsystematic risk. Behavioural FinanceEfficient Capital Market TheoryRandom walk model, categories of efficiency, empirical review, technical analysis. | |||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List
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Other Resources None | |||||||||||||||||||||||||||||||||||||||||
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