BFIN011

The subject introduces and develops the core technical and theoretical concepts of Finance and illustrates their application to practical financial decision-making problems. Two crucial concepts are introduced: (1) the time-value of money (TVM); and (2) financial risk. TVM techniques are applied to the valuation and management of financial instruments, such as annuities, perpetuities and amortising loans, and to financial securities, such as stocks and bonds. Different ways of measuring financial risk are considered and the fundamental relationship between risk and return is demonstrated empirically and explained. TVM and risk analysis techniques are applied to investment and financing decision problems in a Corporate Finance context. In particular, students will learn how firms decide which projects to invest in and how they choose to raise the capital to fund those investments.