Durham University
Programme and Module Handbook

Postgraduate Programme and Module Handbook 2007-2008 (archived)


Department: Economics, Finance and Business (Business)


Type Tied Level 4 Credits 15 Availability Available in 2007/08
Tied to N1KL07
Tied to L1K209


  • None


  • None.

Excluded Combination of Modules

  • None.


  • The main aim of this module is to provide a rigorous grounding in the theory of modern finance at an advanced level and a thorough synthesis of the most important current research in finance , with an emphasis on the applications of the principles and relevance of the theory to the practice of financial management. Both normative and positive aspects of financial theory are examined, together with supporting descriptive and empirical evidence.


  • Introduction to the financial sector and finance theory (principles and focus on valuing financial instruments and explaining the behaviour of individual investors, corporations, financial institutions and markets
  • Consumption and investment decisions and the valuation of risky future cashflows
  • Investment decisions and capital budgeting
  • Choice under uncertainty, diversification and portfolio theory
  • Equilibrium asset pricing models: CAPM, recent developments and applications
  • The valuation of bonds and other debt instruments
  • Introduction to options and futures contracts and markets
  • Corporate valuation
  • The efficient market hypothesis
  • Pricing anomalies and recent developments

Learning Outcomes

Subject-specific Knowledge:
  • By the end of the module students should have:
  • Advanced knowledge and critical understanding of essential components of modern finance theory and associated current research.
  • Explored, understood and appreciated the complexity and contradictions of the current academic literature and its implications for professional financial management practice.
  • Demonstrated ability to learn and work independently in finance, exercising critical judgement and discrimination in the resolution of complex problematic situations.
Subject-specific Skills:
  • Used highly specialised and advanced technical, professional and academic skills in the analysis of relevant specific problems in financial management.
  • Had the opportunity to apply problem solving and analytical skills to issues in financial management in a complex specialised context.
Key Skills:
  • Written Communication.
  • Planning, Organising and Time Management.
  • Problem solving and analysis.
  • Using initiative.
  • Numeracy.
  • Computer Literacy.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

  • Combination of lectures; students' presentations and discussions in seminars will contribute to achieving the aims and learning outcomes of this module. Summative assessment by written examination will test students' knowledge and understanding of the subject-matter, their critical judgement and problem-solving skills.

Teaching Methods and Learning Hours

Activity Number Frequency Duration Total/Hours
Lectures 9 1 per week 2 hours 18
Seminars 4 1 per fortnight 1 hour 4
Preparation & Reading 128
Total 150

Summative Assessment

Component: Examination Component Weighting: 100%
Element Length / duration Element Weighting Resit Opportunity
Unseen Written Examination 2 hours 100%

Formative Assessment:

Students will receive written comments on a formative assignment. Additional formative assessment, and feedback, may take a number of forms such as oral feedback on work prepared by students for seminars; answers to questions either discussed during a seminar, or posted on DUO; discussions with teaching staff during consultation hours, or via e-mail.

Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University