MSc in
Financial Economics

Starts 22nd September 2014

Lasts for 12 months

We require a good honours degree in a relevant subject

IELTS: 6.5

Tuition fees: £6,345 (UK/EU), £15,990 (Rest of the world)

Apply now

The MSc in Financial Economics addresses the issues of analysis and management of risk and uncertainty in relation to all of the financial markets.

Why Study the MSc in Financial Economics?

The programme is designed for people who are looking for careers as professionals in the finance sector, for example stockbroking, investment banking or financial analysis. The programme gives a solid quantitative foundation for careers in the private and public sector.

The programme helps you to understand, analyse and solve economic problems faced by government agencies, central banks, financial institutions and industry.

Usually, students will have had undergraduate training in economics, finance or a quantitative discipline and finance, or financial engineering.

About the MSc in Financial Economics programme

Students follow modules which cover the working of the markets for bonds, stock currencies and derivatives (futures and forwards, options and swaps). Much of the material is very challenging analytically and sometimes technically, but attention is given at all times to the practical questions of how to interpret financial data for research purposes, how to identify and exploit trading opportunities and how to measure and manage risk.

The benefits of studying the MSc in Financial Economics

  • High ranking jobs increasingly demand statistical literacy. This programme will develop your quantitative and econometric skills
  • Computational methods such as MATLAB, E-Views and STATA are naturally built in to regular classes
  • You will interact and learn from a diverse group of faculty who are renowned in their areas of expertise
  • You will make extensive use of the Business School's Trading Room
  • You will be able to participate in a variety of research seminars, where faculty members and industry experts present their latest research.

Graduates of the programme

  • Understand how to measure and manage risk of investment in bonds, stock and derivative securities
  • Can organise, interpret and analyse financial datasets using the latest econometric research techniques, and appreciate the value of macroeconomic analysis and forecasting for financial markets
  • Understand how microeconomics and game theory provide an insight into the working of financial markets and illustrate the working of options, future and other derivative securities
  • Understand time series econometric techniques with respect to financial sector modelling, be competent in using econometric software, and able to design a research project making use of econometric techniques
  • Will be familiar with modern methods of risk management

The Trading Room

The School's Trading Room gives students the practical experience needed to fully understand the Stock Exchange. Students are offered the opportunity to gain a professional Thomson Reuters Certification qualification, free of charge, putting them ahead in the career marketplace.

"Undergraduates with an Economics background (or similar) would definitely feel that it is like tailor-made programme"- Qing Miao, MSc Financial Economics graduateRead more about Qing's time at Cardiff Business School

Programme Structure

Students follow four core modules in the first semester and three core modules and one elective module in the second semester.

Semester 1

Macroeconomics

This module provides a solid understanding of macroeconomic analysis and its application to monetary and financial issues. Topics covered include:

  • a review of the basics of income and interest rate determination
  • aggregate demand and supply, and open economy macroeconomics continuing with macroeconomic policy analysis
  • expectations in macroeconomics; business cycles
  • policy credibility and reputational aspects of policy

Quantitative Methods

This module provides theoretical and practical training in mathematical and econometric methods and their application to monetary and financial problems. Topics covered include:

  • a review of basic mathematical and statistical methods: the linear regression model, static and dynamic models
  • specification tests
  • simultaneous equations and forecasting, with applications to problems in banking and finance

This module is taught so that material will be accessible to any reasonably numerate student. The emphasis is on teaching students how to conduct practical quantitative research projects for themselves.

Microeconomics: Economics of Uncertainty

This module provides a solid understanding of microeconomic analysis and its application to the analysis of uncertainty. Topics covered will include:

  • theory of the consumer
  • choice under uncertainty
  • efficient allocation of risk
  • asset markets, adverse selection and moral hazard
  • the principal-agent model
  • signalling and screening

Principles of Finance

This module introduces students to the fundamental concepts and issues in modern finance that are of concern to all those involved in making financial decisions. Students will learn how to appraise capital investments, how to value various securities such as bonds, stocks, futures and options and understand alternative asset pricing models.

Semester 2

Corporate Finance

This module reviews advanced topics relating to the financing of corporate investments and corporate restructuing. The module examins the main issues relating ot the financing of corporate investments when the assumptions underlying perfect capital markets are not upheld.

Empirical Finance

This module aims to give an overview of the application of econometrics to the study of financial decision making. Topics include:

  • tests of market efficiency
  • time series methods in finance
  • vector auto-regressions, causation and co-integration
  • non-linear methods
  • generalised autoregressive conditional heteroscedasticity model
  • tests for non-linearity
  • generalised methods of moment estimates
  • applications in the published literature

Financial Derivatives

The use or misuse of financial derivatives has been responsible for past financial controversies. This module aims to provide an introduction to the pricing of the major derivative securities and to introduce how derivatives can be employed in the management of financial risk.

and one from the list below:

Development Finance

This module provides training in the economic underpinnings of the financial issues which affect developing countries. Topics include:

  • economic development strategy
  • project evaluation
  • domestic and external sources of finance
  • taxation and public sector control
  • central banking in developing countries
  • regulation and credit control
  • financial deepening
  • exchange rate and interest rate management
  • financial market development.

International Finance

This module is concerned with the financial operations of enterprises in the foreign exchange market. It provides an analytical background for the evaluation of the mainstream theories of exchange rate determination and links these to domestic and international macroeconomic policies. Topics include:

  • the macroeconomics of the open economy
  • exchange rate fundamentals
  • theories of spot and forward exchange rate determination
  • currency options
  • FOREX

International Trade

This module will examine all the main aspects of international trade. Starting with neo-classical trade theory, the module then moves on to look at the new trade theory, which emphasises economies of scale and imperfect competition, then analyses strategic trade policy.

Finally, the module will focus on firms within the global economy, and the extent to which the actions of multinational enterprises can influence trade and growth.

Economic Forecasting

This module provides training in the methods of forecasting used in commercial enterprises. It also introduces the methods of macroeconomic forecasting. Topics include:

  • univariate techniques
  • extrapolation, charting, Box-Jenkins
  • the use of survey information, leading indicators, and futures and forward markets
  • Black-box and VAR methods; econometric models, combining forecasts, the ragged edge problem and signal extraction
  • nonlinear modelling

This module is recommended only for those students who have an undergraduate background in economics.

Mathematical Finance

This module provides an advanced training in finance suitable for students with a background in mathematics and other quantitative disciplines. Topics will cover:

  • introduction to state pricing arbitrage and equivalent martingale measures
  • Black-Scholes and arbitrage free pricing
  • term structure models
  • optimal portfolio choice
  • optimal consumption and investment

Investment and Electronic Trading

This module will provide you with knowledge of investment valuation and trading in the financial markets. In particular, you will learn methods of investment valuation and how they relate to practice.

The module will also enable you to understand modern electronic trading, both in theory and in a simulated trading environment. The module makes use of the School’s Trading Room.

Dissertation

This requires students to produce a 15,000 - 20,000 word dissertation.

Assessment

The taught component of the programme is examined by both assessed work and university written examinations which are held at the end of each semester. The assessed work would be one of:

  • essay
  • group work project
  • individual project
  • class test

Candidates who satisfy the examiners will proceed to the project stage of the programme and prepare a dissertation.

Career Prospects

Graduates should find employment as specialists in financial institutions, corporate treasury departments, central banks and local government.

For further information please contact Professor Kent Matthews

Telephone +44 (0) 29 2087 6953

Contact Us

Cardiff Business School,
Cardiff University,
Aberconway Building,
Colum Drive,
Cardiff
CF10 3EU
United Kingdom

Phone: +44(0)29 2087 6013
Fax: +44 (0)29 2087 4419