Online Finance 2024-2025

Economics is subject within social sciences whose objective is to study how to allocate scarce resources, such as oil fields, bread, cars, haircuts, and financial capital. If there was an unlimited amount of resources, then economics would not be needed. Among other things, financial assets are scarce resources as well. That is one of the reasons why finance is relevant to economics. Conversely, economics is relevant to finance as it enables us to better understand how financial markets function. The objective of this course is to provide you with a sound understanding of the main economic theories and to demonstrate their relevance to finance.

Quantitative methods are used throughout the finance profession. For example, fund managers evaluate investments using quantitative techniques and financial analysts use methods to evaluate forecasts. The purpose of this course is to cover a range of quantitative methods and equip you with a statistical “toolbox” that is central to the finance community. We begin by thinking about data presentation and fundamental statistical concepts. Thereafter, we cover: probability analysis, hypothesis testing, correlation, and linear regression.  Throughout the course we use financial data to interpret key research findings, and we use examples and hands-on activities designed to grow your knowledge in this critical area.

This course examines asset pricing and portfolio management within a modern practical context.  The heart of modern portfolio theory is development of the relationship between expected return and risk. We analyse this central concept using an active learning approach to portfolio optimisation. This is where you build and estimate a portfolio optimisation model in Excel. Thereafter, we compare portfolio weights where different asset pricing models are used to estimate expected returns. During the course consideration is also given to performance measurements such as the Sharpe ratio and Jensen’s alpha. At the heart of our discussion is fulfillment of the objectives, given the constraints of the investor (client) who may be an individual or an institution (such as an endowment or pension fund). Following the ethics provided by the Chartered Financial Analyst (CFA) Institute our aim is to embed contemporary developments in asset pricing within the context of the professional investment arena and the portfolio manager.