Prof Kathy Yuan

This course is compulsory on the MSc in Accounting and Finance. This course is available on the MSc in Econometrics and Mathematical Economics, MSc in Economics, MSc in Economics (2 Year Programme), MSc in Financial Mathematics, MSc in Financial Statistics, MSc in Financial Statistics (Research), MSc in Mathematics and Computation and MSc in Real Estate Economics and Finance. This course is not available as an outside option to students on other programmes. This course uses controlled access as part of the course selection process. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

All students on a programme listed above that meet the availability criteria will be given a place. This course is closed to outside students and does not permit auditing students. Outside students should consider the alternative option of FM473 Financial Markets or FM474 Managerial Finance.

Please contact finance.teachingmanager@lse.ac.uk with any queries.

Global MSc in Management (Accounting and Finance Concentration only)

This course is available to other students from the Departments of Mathematics and Statistics where regulations permit.

For students from other departments who meet the necessary criteria (if applicable), you are likely to be given a place, but this is not guaranteed. Chances of gaining a place on this course are increased if it is selected during initial course selection in the Autumn Term.

This course cannot be combined with FM473 Financial Markets or FM474 Managerial Finance.

Mutually exclusive courses:

This course cannot be taken with FM474A or FM473W or FM473A or FM474W at any time on the same degree programme.

Additional requisites:

Basic Mathematics and Statistics knowledge. The course is self-contained but it covers a broad set of topics. Some prior knowledge of economics, finance and accounting is advised.

This course aims to equip students with the fundamental concepts and tools underlying the asset markets side of modern finance. The course covers asset markets and valuation. The valuation of fixed-income securities is covered first, followed by the valuation of stocks, and derivatives such as futures and options. Concepts emphasized include the present-value formula, valuation by arbitrage, portfolio theory, the CAPM, market efficiency, and binomial and Black-Scholes models.

30 hours of seminars in the Autumn Term.

This course is taught in an interactive format. There is no distinction between lectures and classes/seminars; there are simply “sessions” where the pedagogical approach is always interactive.

Weekly problem sets covered in classes.

• J. Berk and P. DeMarzo, Corporate Finance, Pearson International Edition.
• Z. Bodie, A. Kane and A. Marcus, Investments, 8th edition, McGraw Hill. ISBN:0-07-338237-X

Full details of reading will be specified in the Course Programme and Reading List which will be distributed at the first lecture.

Exam (100%), duration: 90 Minutes, reading time: 10 minutes in the Spring exam period.