Principles of Finance
This information is for the 2021/22 session.
Dr Cameron Peng and Dr Hongda Zhong
This course is compulsory on the BSc in Finance and BSc in Financial Mathematics and Statistics. This course is available on the BSc in Accounting and Finance, BSc in Actuarial Science, BSc in Business Mathematics and Statistics, BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Management, BSc in Mathematics and Economics and BSc in Mathematics, Statistics and Business. This course is not available as an outside option nor to General Course students.
Students on the BSc in Management can only take this course if they have met the following programme-specific prerequisites: a 1st in MA107 and/or ST107 and email permission from their Senior Undergraduate Tutor.
This course cannot be combined with FM212. Students on the BSc in Accounting and Finance can only take this course if they have met the general course prerequisites as below.
Students must have completed: one level 1 Economics course (either EC100 Economics A or EC102 Economics B), MA100 and ST102.
The course examines the theory of financial decision-making by firms and examines the behaviour of the capital markets in which these decisions are taken. The topics covered are the theory of capital budgeting under certainty in perfect and imperfect capital markets, portfolio theory, equity and bond markets, the capital asset pricing model, efficient markets, derivative pricing, sources of funds, basic theory of capital structure and the cost of capital, company dividend decisions and financial markets and institutions.
This course covers the same topics as FM212. Thus, both FM213 and FM212 are equivalent content-wise. However, compared to FM212, this course puts more emphasis on the underlying statistical theory and relies more on the use of mathematical methods.
20 hours of lectures and 15 hours of classes in the MT. 20 hours of lectures and 15 hours of classes in the LT. 2 hours of lectures and 1 hour and 30 minutes of classes in the ST.
Students are expected to produce written work for classes and to make positive contributions to class discussion.
Detailed course programmes and reading lists are distributed at the start of the course. Illustrative texts include: Principles of Corporate Finance by Richard Brealey, Stewart Myers, and Franklin Allen, McGraw-Hill Inc.
Exam (100%, duration: 3 hours) in the summer exam period.
Course selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Important information in response to COVID-19
Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.
Total students 2020/21: 454
Average class size 2020/21: 26
Capped 2020/21: No
Value: One Unit
Personal development skills
- Problem solving
- Application of information skills
- Application of numeracy skills
- Commercial awareness