Masters (MSc) in Finance
Learn the finance essentials; from derivatives and investments, to mergers and acquisitions and global markets.
This master's in finance enables you to work with our award-winning finance experts to build in-demand quantitative skills. You will gain the essential information needed to pursue a range of exciting finance careers at an international level.
The MSc Finance course has both CFA Institute Affiliate status and Economic and Social Research Council (ESRC) status which positions you to progress to a research degree. It is also linked to The Manchester Accounting and Finance Group – one of the leading accounting and finance units in Europe.
Read about other business Master's degree courses at Alliance MBS >>
Year of entry: 2019
Course unit details:
|Unit level||FHEQ level 7 – master's degree or fourth year of an integrated master's degree|
|Teaching period(s)||Semester 1|
|Offered by||Alliance Manchester Business School|
|Available as a free choice unit?||No|
This course, or similar course at UG level, must be undertaken if you wish to take BMAN70192 Real Options in Corporate Finance in Semester 2
The course equips students with essential techniques useful for valuing financial derivatives and hedging financial risk. The course emphasizes the general prin-ciples central to derivatives valuation, including no-arbitrage arguments and risk-neutral valuation methods, together with their implications for the pricing of finan-cial derivatives. It also discusses some more advantage topics, such as valuing derivatives using Monte-Carlo simulations and finite difference methods, using alternatives to the Black-Scholes model, such as the constant elasticity of vari-ance (CEV) model, the mixed jump-diffusion model, and stochastic volatility mod-els, or calculating a financing institution’s value at risk (VaR). All topics are intro-duced from an intuitive – and not a mathematically rigorous – perspective.
On completion of this unit successful students have
- Be familiar with the most common derivatives traded in financial markets;
- Have some broad knowledge about how derivative contracts have developed over time, are quoted in the press, are traded in financial markets, etc.;
- Be able to understand, from an intuitive perspective, how derivative securities are valued, using replication approaches or risk-neutral valuation approaches;
- Be able to understand how derivative securities can be used in financial markets to either increase (speculate) or decrease risk (hedging);
- Be able to solve standard exercises involving the calculation of derivative values/prices or the optimal number of derivative contracts used for hedging
- Be aware of alternatives to the commonly used Black-Scholes option valuation model, such as mixed jump-diffusion and stochastic volatility models;
- Have some broad knowledge about important exotic options;
- Be able to use Monte-Carlo simulations, the implicit and explicit finite difference methods and the Longstaff and Schwartz (2001) least squares regression approach to value more complicated (exotic) derivatives;
- Be able calculate value-at-risk value-at-risk using standard approaches;
- Be able to exercise a capacity for independent and self-managed learning;
Coursework project (25%)
Written Examination (75%) 1 ½ hour
- Informal advice and discussion during a lecture.
- Online exercises delivered through the Blackboard course space.
- Responses to student emails and questions from a member of staff.
- Generic feedback posted on Blackboard regarding examination performance
- Written and/or verbal comments on the coursework.
The recommended text for the course is:
Hull J. C. (2018), Options, Futures, and Other Derivatives. 9th Edition, Prentice-Hall. ISBN-10: 1-292-21289-6. ISBN-13: 978-1-292-21289-0;
The website linked to the textbook is: http://www.rotman.utoronto.ca/~hull
|Scheduled activity hours|
|Assessment written exam||1.5|
|Independent study hours|
|Kevin Aretz||Unit coordinator|
Informal Contact Methods
- Office hours
- Online Learning Activities (blogs, discussions, self assessment questions)
"Alliance MBS provides the opportunity to meet experts from your field of interest. You feel secure around the friendly environment and consistently feel the support of everybody. This year I lived everything to a maximum level; having fun with international friends and studying really hard. In a word, I would say that it was amazing!"