MSc Finance (major: Quantitative Finance)
Is this programme for me?
The MSc Finance enables you to deepen your understanding of financial markets, banks, and their relation to economic performance. It provides a sound platform for advancing your career in finance and policy. Because finance is so wide ranging, the degree enables you to choose between three majors:
- Economic Policy
- Financial Sector Management
- Quantitative Finance
The three alternative pathways of the MSc Finance programme enable you to select a study path best suited to your objectives and skills.
The MSc Finance (major: Quantitative Finance) is designed principally for postgraduates whose work in banks and other financial institutions requires knowledge of statistical (particularly econometric) and quantitative approaches to risk and derivatives. It is particularly suitable if you have a first degree in engineering, applied science, applied mathematics, economics, or similar subjects, but also suitable for others with quantitative skills.
This programme will equip you with the necessary statistical (particularly econometric) skills and quantitative approaches to risk and derivatives.
|You study||Study period||Cost (2012-13)|
|MSc||8 modules||2-5 years||£9,840|
|Individual Professional Awards||You can take up to three individual modules from this distance learning programme. Each module lasts eight weeks and you are registered for two years. The fee per module is £1,230.|
The programme has been developed by academics at the Centre for Financial and Management Studies (CeFiMS), a postgraduate research and teaching department within SOAS, University of London. Staff at CeFiMS have international reputations and are involved in researching their subjects at the very limits of current knowledge.
As a graduate of this programme you will be well prepared for senior research and other positions in banking, fund management, consultancy, central banks and international bodies.
Comprehensive study materials and support
You will be sent all the study materials that you need to complete the programme, which may typically include:
- A core text specially written for the course. This is the backbone of the course and is comparable to a series of lecures. It is organised into eight study units, each of which lasts one week.
- Textbooks and collections of readings.
- Online and multimedia tools. Some courses provide video lectures on DVD. These expand on issues that have been raised in the course and relate the material to 'real world' examples. The Online Learning Environment (OLE) provides instant access to course materials and also offers academic, administrative and technical support.
- A study calendar for each course to help you organize your time. This sets out a schedule for coursework and assignment deadlines.
- A Welcome Pack is available online, which provides you with resources and tips on effective distance learning. We will also send you a Study Skills textbook to help you manage your studies.
Your time commitment
This will depend partly on choices you make, but most students take three years to complete an MSc. The study calendar consists of five sessions per year. Each session is devoted to a specific module and lasts eight weeks (with the exception of the fifth session which runs for 10 weeks). During each session you will need to allocate between 15-20 hours per week to complete the programme.
Summary of key dates
|Application deadline||8 October 2012||17 December 2012||3 April 2013||4 June 2013|
|Start date||3 December 2012||18 February 2013||20 May 2013||22 July 2013|
Structure and Syllabus
Choose five core modules from the list below plus three other modules from the list of electives or the list of core modules.
- Econometric principles and data analysis
This course provides an introduction to econometric methods, examining how we can start from relationships suggested by economic theory, formulate those relationships in mathematical and statistical models, estimate those models using sample data, and make statements based on the parameters of the estimated models. You are provided with Eviews econometric software as part of the course. We recommend that you take this course before progressing onto the more advanced sequel 'Econometric Analysis and Applications'.
Unit 1: Introduction to Econometrics and Regression Analysis
Unit 2: The Classical Linear Regression Model
Unit 3: Hypothesis Testing
Unit 4: The Multiple Regression Model - Estimation, Hypothesis Tests and Multicollinearity
Unit 5: Heteroscedasticity
Unit 6: Autocorrelation
Unit 7: Nonnormal Disturbances
Unit 8: Model Selection and Course Summary
- Econometric analysis and applications
'Econometric Analysis and Applications' is the second, more advanced, econometrics course offered to students wanting to broaden their understanding of the application of quantitative methods to economic inquiry. We recommend that you study the 'Econometric Principles and Data Analysis' course prior to this. The course assumes that you have studied the classical linear regression model at an introductory level and that you are familiar with the assumptions that underlie that model. You will be aware that there are many cases in which these assumptions are not satisfied, and know how such problems as heteroscedastic disturbances and autocorrelated errors can be detected, and what can be done about them. It is assumed, too, that you have a basic working knowledge of the econometric software, Eviews, introduced previously in 'Econometric Principles and Data Analysis', although basic instructions for using the program are provided here too.
Unit 1: Dummy Variables
Unit 2: Dynamic Models - Lags and Expectations
Unit 3: Simultaneous Equation Models
Unit 4: The Identification Problem
Unit 5: Simultaneous Equation Models - Estimation
Unit 6: Univariate Time Series - Stationarity and Non-stationarity
Unit 7: Multivariate Time Series Analysis
Unit 8: Forecasting
- Financial econometrics
We define financial econometrics as 'the application of statistical techniques to problems in finance'. Although econometrics is often associated with analysing economics problems such as economic growth, consumption and investment, the applications in the areas of finance have grown rapidly in the last few decades.
Financial markets and others generate vast amounts of data on asset returns, their volatility, and other financial variables in long and high-frequency time series. The ability to analyse market behaviour requires knowledge of the properties of time series and appropriate estimation methods. Since the early 1980s techniques for analysing time series, which exhibit auto-regression, have yielded important studies of financial markets, increasing our knowledge of financial variables’ volatility. The objective of the course is to extend your knowledge and equip you with methods and techniques that allow you to analyse these finance-related issues.
Before starting this course, we recommend that you first complete 'Econometric principles and data analysis' [C330] and 'Econometric analysis and applications' [C332].
Unit 1: Statistical Properties of Financial Returns
Unit 2: Matrix Algebra, Regression and Applications in Finance
Unit 3: Maximum Likelihood Estimation
Unit 4: Univariate Time Series and Applications to Finance
Unit 5: Modelling Volatility – Conditional Heteroscedastic Models
Unit 6: Modelling Volatility and Correlations – Multivariate GARCH Models
Unit 7: Vector Autoregressive Models
Unit 8: Limited Dependent Variable Models
- Risk management: principles and applications
This course examines the techniques and the foundation of risk management in corporations. It covers the use of derivatives, portfolio allocation, the value of risk, and the management of credit risk and operations risk. The course includes cases and applications.
Unit 1: Introduction to Risk Management
Unit 2: Portfolio Analysis
Unit 3: Management of Bond Portfolios
Unit 4: Futures Markets
Unit 5: Options Markets
Unit 6: Risk Management with Options
Unit 7: Value at Risk
Unit 8: Credit Risk
The expansion of financial markets since 1973 has been founded on the growth of derivatives, both over the counter derivative contracts and exchange traded contracts. It was made possible by the development of models for valuing derivatives based upon the mathematics of stochastic calculus. In this course you learn the application of those principles to the valuation of derivatives.
Unit 1: Derivatives Contracts
Unit 2: Properties of Stock Options
Unit 3: The Behaviour of the Stock Price and the Black-Scholes model
Unit 4: Greek Letters and Trading Strategies
Unit 5: Interest Rate Models
Unit 6: Credit Derivatives and Credit Risk
Unit 7: Some Exotic Options
Unit 8: Further Numerical Procedures
- Modelling firms and markets
Modelling firms and markets is an introduction to the economics of information and uncertainty. Multi-person decision problems play a crucial role in industrial economics. This course begins with the basic concepts of game theory - the problems of decision-making under a multi-person environment. We will then examine the problems of private information and analyse the role of asymmetric information in market interactions, in particular the problems known as moral hazard (hidden actions) and adverse selection (hidden characteristics) under various economics contexts. You will learn how these informational problems affect the market outcome and if they lead to market inefficiencies, and if so, possible solutions.
Unit 1: Static Games of Complete Information
Unit 2: Dynamic Games of Complete Information
Unit 3: Static Games of Incomplete Information
Unit 4: Dynamic Games of Incomplete Information
Unit 5: Hidden Action (Moral Hazard)
Unit 6: Hidden Characteristics (Adverse Selection)
Unit 7: Auctions
Unit 8: General Competitive Equilibrium
- Macroeconomic policy and financial markets
This course focuses on the relation between macroeconomic factors, macro economic policy and financial markets and institutions. Financial markets and institutions are treated as the central elements in the transmission of macroeconomic policy.
Unit 1: Macroeconomics and the World of Finance
Unit 2: Saving and Finance
Unit 3: Investment and Financial Markets
Unit 4: Monetary Policy and the Central Bank
Unit 5: Fiscal Policy and Government Finances
Unit 6: Expectations, Inflation, and Interest Rates
Unit 7: Foreign Exchange Markets and Foreign Trade
Unit 8: International Capital Flows and Financial Markets
- Microeconomic principles and policy
This course looks at the principles economists use to model the behaviour of individual agents (firms, consumers, and policy authorities) and the ways in which they interact in a market economy. This course examines and builds upon core theories of microeconomics, and is structured around: market equilibrium; consumer demand; theory of the firm; pricing and output in competitive and monopolistic markets. The course explores the economic principles that underpin the influence of market structures - whether markets are competitive or monopolistic - on consumers and firms, how these principles can be applied to economic problems, and their implications for policy.
Unit 1: Theories and applications of microeconomics
Unit 2: Consumer Theory
Unit 3: Theory of Production and Costs
Unit 4: Profit Maximisation and Competitive Supply
Unit 5: Non-Competitive Market Structures
Unit 6: Factor Input Markets
Unit 7: General Equilibrium, Efficiency and Pareto Optimality
Unit 8: Externalities, Public Goods and Asymmetric Information
- Corporate finance C321
This course enables you to relate principles and practice to the financing decisions of enterprises in modern economies. The course analyses the decisions firms make about financing their investments in productive capital.
Unit 1: Perspectives on Corporate Finance
Unit 2: Net Present Value and Capital Budgeting Decisions
Unit 3: Risk, Capital Market Equilibrium and Capital Budgeting Decisions
Unit 4: Efficiency of Capital Markets and Implications for Corporate Financing Decisions
Unit 5: Dividend Policy
Unit 6: Capital Structure I
Unit 7: Capital Structure II: Information Asymmetries and Agency Costs
Unit 8: Mergers
- Corporate governance
This course is specially designed for the postgraduate study of such areas as management, finance, financial law, corporate law, economics and related subjects, and has been designed to increase the depth of your understanding of corporate government issues. The course places a strong emphasis on the relationship between theoretical concepts and real world issues, making a real contribution to your in-depth understanding of the relevant corporate governance issues and future career development.
Unit 1: Introduction to Corporate Governance
Unit 2: Theory of the Firm
Unit 3: Corporate Governance and the Role of Law
Unit 4: Corporate Governance around the World
Unit 5: Board Composition and Control
Unit 6: CEO Compensation
Unit 7: International Governance
Unit 8: Overview of Corporate Governance Codes
- International finance
This course is concerned with the institutions of international finance and the key policy problems that have arisen in recent decades. It presents a policy-oriented perspective, similar to that an economist would use when advising governments on how to work within the modern international financial system and how to overcome its problems.
Unit 1: Evolution of the International Financial System
Unit 2: Foreign Exchange Markets
Unit 3: The Balance of Payments
Unit 4: Balance of Payments Policies - The Mundell-Fleming Approach
Unit 5: Balance of Payments Policies – The Monetary Approach
Unit 6: Fixed and Flexible Exchange Rate Systems
Unit 7: Currency Blocs, Financial Integration and International Co-ordination
Unit 8: Foreign Exchange Problems and Policies of Developing Countries
- The International Monetary Fund and economic policy
Few countries have complete autonomy in macroeconomic policy. For many, policy is conducted in collaboration with the International Monetary Fund (IMF) or supervised by the IMF. The course examines the changing roles of the IMF, the nature of economic policies it encourages countries to pursue, and some of the effects these policies have on the economic environment of business, on the financial sector, and on social conditions. The course gives a simple introduction to the basic IMF economic policy framework, ‘financial programming’. Using different types of countries, including transition economies and developing countries as case studies, it enables students to study issues such as the role of capital controls and the problems of highly indebted countries.
Unit 1: Macroeconomic Stabilisation and the Role of the International Monetary Fund
Unit 2: The IMF’s Approach to Stabilisation
Unit 3: Alternative Approaches to Stabilisation
Unit 4: Stabilisation and the Financial Sector
Unit 5: Stabilisation Policy and the Financial Sector: Institutional Responses to Recent Crises
Unit 6: Stabilisation and the Financial Sector: Some Challenges and Controversies
Unit 7: Stabilisation and Low-income Countries
Unit 8: Challenges for Low-income Countries
- Finance in the global market
The main objective of the course is to enable you to understand some of the main characteristics of that globalised financial world. Because of the centrality of foreign exchange markets to international finance, we regard understanding foreign exchange markets as the core of that objective.
Unit 1: The International context of finance
Unit 2: The markets for foreign exchange
Unit 3: Exchange rates and prices
Unit 4: Exchange rates and interest rates
Unit 5: Managing foreign exchange exposure
Unit 6: International corporate financing and project finance
Unit 7: Capital structure and cost of capital in international financing
Unit 8: Corporate finance and currency crises
- Bank regulation and resolution in banking crises
The recent banking crisis has motivated heightened discussion of the merits of bank regulations used to minimise the risk of bank distress and intervention tools to mitigate its effects. In this course you will study technical aspects of bank regulation, supervision and intervention to resolve crises.
Unit 1: Principles of Bank Regulation
Unit 2: Banking Supervision & Regulation
Unit 3: The Prudential Supervision of Banks
Unit 4: Banking Crises: Weak Banks and Lender of Last Resort Support
Unit 5: Restructuring Failed Banks and Protecting Depositors
Unit 6: The Institutional Structure of Financial Regulation
Unit 7: Regulation, Supervision and Financial Stability
Unit 8: Issues in International Supervision and Regulation
- Banking and capital markets
This course examines the underlying principles and characteristics of banking and financial markets that are the foundation for understanding both their normal role in economies and the headline events. It concentrates on the theoretical and empirical scientific knowledge produced by modern research on banking. Since such knowledge is never fully established or ‘proven’, it enables the student to examine opposing points of view and to discuss the published studies.
Unit 1: Bank-Based vs Market-Based Financial Systems
Unit 2: Why do Banks Exist?
Unit 3: Why Banks Exist: Explanations Based on their Lending
Unit 4: Banks vs Capital Markets
Unit 5: Credit Rationing and Overlending
Unit 6: Bank Runs and Regulatory Responses
Unit 7: Financial Crisis
Unit 8: Portfolio Analysis
- Research methods C353
This course will develop your research skills, which you can later apply to research projects. It will provide you with a thorough understanding of the theoretical concepts, methodological approaches and reporting issues that underpin good quality research projects, and has a specific emphasis on how to evaluate the merits of existing research. It is also a prerequisite if you have decided to write a dissertation.
Unit 1: The Nature of Research
Unit 2: Planning and Designing Research
Unit 3: Reviewing the Literature and Making Methodological Choices
Unit 4: Data
Unit 5A: Interviews, Focus Groups and Surveys
Unit 5B: Introduction to Data Analysis I
Unit 6A: Fieldwork and Observation
Unit 6B: Introduction to Data Analysis II
Unit 7: Validity and Reliability
Unit 8: Writing and Presenting Research
- Dissertation C354 (prerequisite C353 Research methods)
The dissertation is a supervised piece of research on a topic that we will agree with you. It should be 10,000 words long. Before we can consider your proposal to submit a dissertation, we will need to review you academic performance so far. Completion of the Research Methods course is a prerequisite for writing the dissertation.
How you study
Without leaving your job or home you can study, write and submit assignments, receive expert guidance from your CeFiMS tutor and advice from the student support team. In addition to printed study materials, the Online Learning Environment (OLE) allows you to work with course materials, send queries to tutors and submit assignments via the Internet.
When you take a CeFiMS distance learning course you will be sent everything you need to complete your studies. A typical set of course learning materials would include:
- Core text. All courses centre on a specially written core text analogous to a series of lectures.
- Textbooks and collections of readings. Most courses also include one or more textbooks and a collection of recent or classic articles of importance to the subject.
- Study calendar. Students are provided with a study calendar for each course which sets out the schedule for your coursework and assignment deadlines.
- A Welcome Pack is available online, which provides you with resources and tips on effective distance learning. We will also send you a Study Skills textbook to help you manage your studies.
Online Learning Environment
Created by CefiMS to provide additional resources and support, the OLE allows you to:
- access study materials that complement printed texts
- submit assignments
- communicate with tutors
- contact support staff regarding administrative queries
- access online resources provided by the Univeristy of London Library including full-text journal databases of JSTOR and EBSCO.
Note: Students who are eligible to use the OLE are automatically contacted by CeFiMS staff and given information about how to access the system for their course.
Fees may be paid in one of two ways:
|Fee per module||£ 1,230|
|TOTAL MSc||£ 9,840|
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- the fee charged to your local examination centre to cover its costs; this fee will vary
- customs duties/taxes where these are payable on educational materials, including educational USB stick/CDs. We recommend that you check the status of imported educational materials with your country’s customs authorities.
With the exception of the Dissertation, all modules are assessed by one three-hour unseen written examination and two assignments of 2,500 words each. The Dissertation (available as an option for MSc programmes only) is assessed by the submission of a written dissertation of not more than 10,000 words, excluding the bibliography and appendices.
The grade awarded on each individual module will be based on the mark obtained in the written examination and on the combined mark for the assignments. The examination mark and the combined mark of the assignments will be weighted on the scale 70:30. If you fail an examination at the first sitting, you will be allowed one further attempt after which your registration will cease.
Exams, both overseas and in the UK, take place once a year in September/October. They are normally held in a student's country of residence, using the existing system of overseas examinations authorities which the University of London operates for all its External students. Exams for students in the United Kingdom and Republic of Ireland are normally held in London.
In order to be considered for registration applicants must have:
- A Bachelor’s degree in finance, economics or other appropriate discipline, from a UK university or other institution acceptable to the University, or an equivalent international qualification (qualifications in other subjects will be assessed on their merits)
- Previous education and experience without a UK Bachelor’s degree, or international equivalent, that satisfies the University as a qualification on the same level as a UK Bachelor’s degree approved under the point above for this purpose and has included suitable preliminary training.
For awards at FHEQ level 7, students must provide satisfactory evidence showing that they have passed within the previous three years a test of proficiency in English at the following minimum level:
- IELTS with an overall grade of at least 6.5 with a minimum of 6 in each sub test; or
- TOEFL with a score of 250 on the computerised test plus a Test of Written English (TWE of at least 4.5); or
- a test of proficiency in English language from the prescribed list published by the Universtiy.
Where an applicant does not meet the prescribed English language proficiency requirements but believes that they can demonstrate the requisite proficiency for admission the University may, at its discretion, consider the application.
Note: Some programmes will require greater proficiency in English language; these requirements will be reflected in the relevant programme regulations.
All students must have regular access to a computer and the internet. This may be for accessing the Student Portal, downloading course materials from the virtual learning environment or accessing resources from the Online Library.
You will also need suitable hardware capacity on your computer for document storage as well as basic software such as a PDF reader.
Some programmes have courses or modules that use additional software. Where this is the case, information is given with the relevant course descriptions.
Academic leadership - CeFiMS
The Centre for Financial & Management Studies (CeFiMS) is a postgraduate research and teaching department at SOAS, University of London.
Our programmes give students a strong academic foundation to their professional skills. Other students study for a degree with us because of their love of learning and their desire to widen their understanding of the world. The programmes are available in a range of flexible options, so you can choose the speed, depth and even the location of your postgraduate study.
As one of our graduates, you will become part of an exclusive network of alumni based in leading private and public sector organisations throughout the world.
In total, more than eighty academics act as online tutors. In addition, there is a dedicated team of student advisers. For more information, please visit the CeFiMS website at www.cefims.ac.uk [external link].