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Students on the MPhil in Finance programme's Finance specialisation choose two electives from the following:

Actuarial Statistics

Taught by the Faculty of Mathematics (part of the Maths Part III degree).

This course provides an introduction to various topics in non-life insurance mathematics. These topics feature in the Institute and Faculty of Actuaries examinations CT6 and ST3.

Topics covered include:

  • Loss distributions
  • Reinsurance
  • Aggregate claims
  • Ruin theory
  • Credibility theory
  • No claims discount systems

A high level of skill in mathematics, such as would be acquired in an undergraduate degree in Mathematics or a cognate discipline, is required for this course.

Advanced Financial Models

Taught by the Faculty of Mathematics (part of the Maths Part III degree).

This module is an introduction to the modelling of financial derivatives. It examines:

  • Discrete-time models. Survey of minimum-variance approaches to hedging. Complete and incomplete markets; minimal martingale measure. Characterisation of lack of arbitrage. Pricing assets in multi-period models. Optimal stopping; Snell envelope; relation to pricing American options.
  • Brownian motion and stochastic calculus. Introduction to Brownian motion; hitting times; martingales. Girsanov Theorem and change of measure. Stochastic integrals; Itô's Lemma. Ornstein-Uhlenbeck process.
  • Black-Scholes model. European call option; Black-Scholes formula. Self-financing portfolios; general partial differential equation for pricing claims. Barrier and other exotic options. Computational issues.
  • Interest-rate models. One-dimensional models: Vasicek; Cox-Ingersoll-Ross. Whole yield-curve approaches: Heath-Jarrow-Morton; Gaussian random-field models; characterisation of martingale measure; structure of covariance. Pricing interest-rate claims.

Continuous Time Finance

This course provides you with an overview of continuous-time finance methods and their applications to corporate finance and financial economics. The course is taught primarily on the basis of journal articles, supplemented with the lecturer's own teaching notes. Throughout the course you should also learn critically to assess and evaluate papers.

Important note: This course is offered biennially. If you wish to continue onto the PhD at Cambridge Judge, this course is mandatory if it's running during your MPhil year.

Strategic Valuation: Uncertainty & Real Options in System Design

This course introduces students to the real options paradigm as a project design and evaluation tool. This paradigm emphasises the value of flexibility in project design and appraisal. For example, a small plant with an expansion option as opposed to building a big plant from the start gives the project manager the flexibility to expand if demand is high, without committing to high capacity a priori, thus avoiding "white elephants". Thus, flexibility has value. Flexibility also, however, costs money. So how much flexibility shall we build into the system? This course gives you with a mindset and a suite of tools to tackle such problems. We expect you to be familiar with probability and statistics at the level of an introductory undergraduate course.

plus selected electives from other programmes

Please note that if you're planning on continuing on to a PhD at the School, you will need to choose particular electives. Find out more about our PhD pathways

Closing dates

Deadline for applications: 1 Mar 2018
However we recommend you apply before December.

Cambridge Trusts funding deadlines are 11 October for Gates US applicants, 6 December for applicants from all other countries.


Funding available to our MPhil in Finance students includes University of Cambridge scholarships, Cambridge Judge Business School bursaries and external scholarships.

Find out more about scholarships