Module 3: Foundations of Investments
10 January 2014
This Module provided an introduction to asset pricing theory and modern portfolio theory, and introduced some applications of these theories to investment decision-making. It aimed to build fundamental knowledge of derivatives and fixed income products, and offer concepts and analytical tools related to investments.
The first part of the Module dealt with fixed income securities, the second on equities and risk, followed by practical knowledge of various derivatives. It aimed at “demystifying” fancy and often confusing derivatives products, including forwards and futures, as well as options.
We found the case studies (e.g. the Nikkei reconstitution), Excel walkthroughs, overview questions and wrap-up revision most useful. The latter two helped tremendously to recap what we need to know from each session. Prof Seasholes was humorous and thought-provoking, explained very clearly and was able to relate theories to practice.