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Core courses on the Cambridge Master of Finance

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.
Ewan Kirk, CEO, Cantab Capital Partners

The Master of Finance core courses at CJBS cover a mixture of finance theory, accounting, modelling and statistics. The courses are designed to provide students with a thorough understanding of finance.

Core Finance courses

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 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.

Equity Valuation

This course is about how to value the equity of a public 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. It omits derivatives, which are covered elsewhere in the MFin syllabus. The goal is to give students an understanding of how the financial system arises from the underlying customer needs of finance. We also explore the macroeconomic context in which money and finance arises. We examine the main types of financial institutions that provide and use these products. We also look at the influence of climate change on the financial system.

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 module is an introductory course in corporate finance. The objective of the course is to provide you with the conceptual framework necessary to appreciate and understand the problems facing the financial manager of an operating business. The course is devoted to the two basic financial problems that all companies face: (1) On what should funds be spent (i.e., investment decisions)? and (2) From where should funds be obtained (i.e., financing decisions)?

Econometrics

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. This module enables students to understand and use linear regression and associated statistical techniques to estimate causal relationships from observational data. The objective is to develop practical competence in applying regression analysis and related techniques to quantify relationships and test conjectures in a variety of contexts that are relevant to Finance.

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.

Non-finance topics

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 bitesize 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 taught by MBA teachers, including: Innovation, Strategy and Leadership.
  • Subjects of general business and finance interest such as: Business and Finance in India, Climate Change and Systemic Risk.
  • Other finance subjects not covered elsewhere in the course such as Technical Analysis and Wealth Management.

Management, Leadership and Ethics

This is an essential part of the MFin programme, designed to help you get the most out of the MFin projects, and is taught by a university lecturer. This course is designed to provide you with essential preparation for MFin teamwork (including best practices in teamwork and team work ethic). This will be particularly helpful for you as you embark upon the Equity Research Project and the Group Consulting Project later in the year. 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.

It should be understood that this is not a recipe for how to ‘do’ management and leadership, 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 has shown that these sessions contribute significantly to improving team awareness and skills during the MFin year and beyond.

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 central to success in many areas across the Finance spectrum. In order to help you enhance your modelling skills, we will be running financial modelling sessions in Michaelmas term 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, so that you can:

  • 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

In addition to the above, the following modelling workshops will be scheduled for later in the academic year:

  • Advanced valuation modelling
  • LBO modelling
  • Project finance modelling
  • Real estate modelling