Cambridge has excellent faculty in financial mathematics and the Master of Finance will bring their expertise together with that of leading practitioners to create a very powerful combination for students.
The Master of Finance core courses cover a mixture of finance theory, accounting, modelling and statistics. They provide a solid grounding in the key areas of this subject and deliver the material essential for any student wishing to study finance.
Approximately 90% of the core content focuses on finance-related material:
Introduction to Derivatives
An introduction to the most widely used financial derivatives, their mechanics, pricing, risks and uses. The course covers the Futures, Forwards, Swaps and Options markets, focussing on the interest rate, equity and FX asset classes. The course book is John Hull's Options, Futures and Other Derivatives, but the formal mathematics is kept to a minimum. The course provides the basics needed to proceed to the Further Derivatives elective. The course is taught by Peter Allen, previously Head of Equity and Credit Derivatives Research at JP Morgan Securities in London.
Course Leader: Dr Peter Allen
The application of statistics to economic problems is called econometrics. This course gives you an introduction to the main uses of econometrics relevant to finance, which is time series analysis. You apply theory to actual data using specialised software. The course is a preparation for those who wish to do more advanced financial econometrics later in the programme.
Course Leader: Dr Paul Kattuman
Economic Foundations of Finance
This course is a more rigorous, microeconomics-based analysis of the key concepts in the theory of finance. It provides the economic foundations for the rest of the MFin programme.
Course Leader: Dr Amir Amel-Zadeh
This course builds on the core Derivatives course to apply the key ideas to equity derivatives. It covers theory and practice with an emphasis on developing working tools, using Excel as the main medium of instruction. It is based on John Hull's popular textbook Options, Futures and Other Derivatives. It is taught by Peter Allen, who was until recently the head of equity and credit derivatives research at JPMorgan Securities in London. Peter has a PhD in maths and is a qualified teacher.
Course Leader: Dr Peter Allen
Financial Institutions & Markets
This course describes and analyses how the various parts of the financial services industry fit together, what the main products and services are, and what types of firm supply them. It includes the products used by firms and governments to raise money, to manage risk, and to transform assets. The course is based mainly on Money and Capital Markets by Rose and Marquis but also covers some international macroeconomics. The emphasis is on understanding how client needs translate into actual services and their common characteristics.
The Worshipful Company of International Bankers (WCIB) Annual Prize is awarded for the best performance on the Financial Institutions and Markets course. We are very grateful to the WCIB for supporting the MFin with their prize.
Course Leader: Dr Simon Taylor
Financial Reporting & Analysis
This course introduces the purpose behind the accounting structures in common use and overcomes the jargon which can be off-putting and confusing. It presents accounts as a natural consequence of the need for communication between companies and the wider business community. It is taught by Jenny Chu, University Lecturer in Accounting and a former analyst at Credit Suisse and Barclays Global Investors.
Course Leader: Dr Jenny Chu
Fundamentals of Credit
This course gives you a solid grounding in the analytical techniques (both qualitative and quantitative) for assessing counterparty credits as well as a range of credit instruments. An advanced understanding of cash flow analysis, assessing liquidity risk and other key warning signs of corporate distress will also be covered by way of modelling exercises. The course will cover the role of the credit rating agencies, credit derivatives and other credit risk mitigation tools.
The course is taught by Marwa Hammam, who was until recently a Senior Credit Officer with Citigroup and has over 12 years of experience in counterparty credit risk management; a range of guest speakers from across the Credit spectrum will complement the course delivery.
Course Leader: Marwa Hammam
Principles of Finance
This course emphasises ideas and intuition rather than rigour. It uses the well-established Brealey, Myers and Allen textbook Principals of Corporate Finance, and covers the key concepts of investment appraisal, capital structure, dividend payout policy and valuation financing instruments, and the measurement and treatment of risk. It is taught by Bart Lambrecht, Professor of Finance at Cambridge Judge Business School and Director of the Cambridge Endowment for Research in Finance.
Course Leader: Professor Bart Lambrecht
A small part of the MFin syllabus is devoted to non-finance topics which are relevant to people working in a finance role:
Management Lecture Series
This course consists comprises of a series of 'bite-size' seminars devoted to non-finance topics that are relevant to those working in a finance role. Topics are chosen to illustrate the broader business and organisational context in which finance ideas are used. Examples include:
- Other business school subjects including: Organisational Behaviour, Strategy and Leadership
- Subjects of general business and finance interest including more niche finance related subjects such as High Frequency Trading
- Other finance subjects not covered elsewhere including technical analysis
Management Practice is an essential part of getting the most out of the MFin projects. The course focuses on three principal areas: yourself, others, and the interaction between the two. In your working career you need to be able to work with and through others. This requires an understanding of how our actions and perceptions shape social situations. The Management Practice course serves as a starting point for this process by providing loose models and frameworks with which you can structure your observations. It should be understood that this is not a recipe for how to 'do' management but rather like all models it attempts to capture some element of reality, albeit with a sizeable error term. The course involves a series of readings and activities to help develop an understanding of self and others as well as a reflective approach to learning the practice of management.
Experience shows that few students are effective in teamwork and these sessions in Michaelmas and Lent are important for improving team awareness and skills.
Course Leader: Dr Ben Hardy
Financial Modelling Workshops
One of the overall aims of the MFin programme is to equip students with a broad and relevant toolkit of skills that they can leverage fully in their post MFin careers. Developing strong financial modelling skills is quite central to success in many areas across the Finance spectrum. In order to help students enhance their modelling skills, we run a two day financial modelling programme. This programme is intended to train students in model building best practice through a series of hands on exercises including the construction of a fully integrated model from scratch.
The benefits of attending the full two day programme are to:
- Be faster and more efficient in the use of the Excel functions, formulas and tools used in modelling
- Have a clear method for building reliable, robust and flexible models
- Understand design principles
- Have a set of tools for analysing and sensitising financial models
We also run more specialised modelling sessions including LBO modelling, and technical analysis.