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 per cent of the core content focuses on finance-related material:
Economic Foundations of Finance
This course covers the foundations of financial economics and introduces the theoretical underpinnings of modern finance. While the course is largely self-contained, basic familiarity with finance, microeconomics and statistics will be useful. The treatment will be somewhat rigorous, but concepts will be carefully developed and illustrated with graphical analysis and/or practical examples.
Although the course will focus on the theoretical foundations of finance, practical relevance and applications will be highlighted throughout the lectures and the computer lab sessions.
This course is about how to value the equity of a company. It is part of the preparation for the Equity Research Project but has wider application, as the principles are used in M&A and private equity. We will look at the theory and practice of discounted cash flow and multiples analysis. The emphasis is on practice, with theory being used only to establish the logical underpinnings of the techniques.
Financial Institutions and Markets
This course covers the main types of financial institutions and markets, from money and the control of it by central banks, to short and long-term debt instruments, equity markets, investment banking, investment management and insurance. It omits options and futures, which are covered in the Derivatives course. The goal is to give students an understanding of how the financial system arises from the underlying customer needs of finance and risk management. It also explores the macroeconomic context in which money and finance arises, including a brief look at the global financial system. It examines the main types of financial institutions that provide and use these products.
Financial Reporting and Analysis
Knowledge of accounting is essential for understanding the financial performance of any organisation. The main objective of this course is to help students become informed users of financial statements. The course will first focus on building a foundation of knowledge for understanding accounting measurement and reporting.
Introduction to Derivatives
An introduction to the most widely used financial derivatives, their mechanics, pricing, risks and uses. The course covers the foundations of options pricing and introduces students to the key concepts of valuation of the main categories of derivatives and their use in hedging. The course book is John Hull’s Options, Futures and Other Derivatives, but the formal mathematics is kept to a minimum.
Principles of Finance
This course aims to treat the principal topics and issues in finance that are of concern to the general manager and to all those needing to make financial decisions. These include, but are not limited to, Net Present Value, investment criterions, measures for risk and return, the financing decision and financing instruments.
The course is not designed for specialists in finance. Rather, it is aimed at providing the non-specialist with a general understanding of theoretical and practical financial issues.
The application of statistics to economic problems is called econometrics. This course gives students an introduction to the main uses of econometrics relevant to finance, particularly regression analysis. Students 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 course.
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.
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
- 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.
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.