Login Create Account

Back to Course Catalog

FMT212Sciences2 Unitsintermediate

Financial Decision Making

This course introduces students to financial decision theory, covering modeling of uncertainty, basic financial assets like bonds and stocks, and asset pricing models. It explores portfolio optimization techniques and risk management strategies. Students will learn about capital asset pricing, dividend decisions, and factors influencing stock values. The course also examines fixed-income securities and the impact of market factors on investment returns, providing a comprehensive overview of financial decision-making.

Generate AI Study Notes

Transform this course into personalized study materials with AI

150h

Study Time

13

Weeks

12h

Per Week

intermediate

Math Level

Course Keywords

Financial ModelingAsset PricingPortfolio OptimizationRisk ManagementInvestment Decisions

Course Overview

Everything you need to know about this course

Course Difficulty

Intermediate Level

Builds on foundational knowledge

65%

intermediate

📊

Math Level

Moderate Math

📖

Learning Type

Theoretical Focus

Course Topics

Key areas covered in this course

1

Modelling of Uncertainty

2

Bonds: Types and Features

3

Stocks: Characteristics and Valuation

4

Buying and Selling Stocks

5

Fixed-Income Securities

6

Capital Asset Pricing Model (CAPM)

7

Portfolio Optimization

8

Risk Management

Total Topics8 topics

Ready to Start

No specific requirements needed

This course is designed to be accessible to all students. You can start immediately without any prior knowledge or specific preparation.

Assessment Methods

How your progress will be evaluated (3 methods)

Assignments

Comprehensive evaluation of course material understanding

Written Assessment

Tutor-Marked Assignments

Comprehensive evaluation of course material understanding

Written Assessment

Final Examination

Comprehensive evaluation of course material understanding

Computer Based Test

Career Opportunities

Explore the career paths this course opens up for you

Financial Analyst

Apply your skills in this growing field

Portfolio Manager

Apply your skills in this growing field

Investment Banker

Apply your skills in this growing field

Risk Manager

Apply your skills in this growing field

Financial Advisor

Apply your skills in this growing field

Industry Applications

Real-world sectors where you can apply your knowledge

Investment ManagementBankingInsuranceCorporate FinanceFinancial Consulting

Study Schedule Beta

A structured 13-week journey through the course content

Week

1

Module 1: Modelling of Uncertainty

4h

Unit 1: Modelling of Uncertainty

4 study hours

•Read the introduction to understand the importance of models in operations research.
•Define a model and describe the process of modelling.
•Classify different types of models and understand their characteristics.
•Outline the advantages and disadvantages of using models in decision-making.

Week

2

Module 2: Basic Financial Assets and Related Issues: Bonds

5h

Unit 1: Bonds

5 study hours

•Review the definition of a bond and understand its role in finance.
•Identify and differentiate between various types of bonds (municipal, zero-coupon, agency, corporate, high-yield).
•Examine the features of bonds, including maturity dates, interest payments, and credit ratings.
•Discuss the benefits, advantages, and disadvantages of investing in bonds.

Week

3

Module 2: Basic Financial Assets and Related Issues: Stocks

5h

Unit 2: Stocks

5 study hours

•Explore what stocks have to offer investors and the appeal of common stocks.
•Understand stock price behavior and the concepts of bull and bear markets.
•Learn how to calculate stock returns and the factors influencing them.
•Discuss the pros and cons of stock ownership, including benefits and disadvantages.

Week

4

Module 2: Basic Financial Assets and Related Issues: Stocks

5h

Unit 3: Buying and Selling of Common Stocks

5 study hours

•Familiarize yourself with the process of buying and selling common stocks.
•Learn how to read stock quotes and understand transaction costs.
•Determine the par value, book value, market value, and investment value of common stocks.
•Understand the dividend decision process and corporate versus market factors.

Week

5

Module 2: Basic Financial Assets and Related Issues: Stocks

5h

Unit 4: Evaluation of Common Stocks

5 study hours

•Understand the rationale behind common stock evaluation.
•Identify the sources of common stock value, including dividends.
•Learn about the concept of present value of future dividends.
•Analyze growth prospects for stocks in aggregate, considering GNP and earnings per share.

Week

6

Module 2: Basic Financial Assets and Related Issues: Stocks

5h

Unit 5: Investing in Fixed-Income Securities

5 study hours

•Explore the concept of investing in fixed-income securities.
•Understand the benefits of investing in bonds and their versatility.
•Analyze total returns in the bond market, considering current income and capital gains.
•Identify essential features of a bond, including maturity date and call features.

Week

7

Module 3: Asset pricing,

5h

Unit 1: Asset pricing

5 study hours

•Define the Capital Asset Pricing Model (CAPM) and its components.
•Differentiate between systematic and specific risk.
•Understand asset-specific required return and its calculation.
•Discuss the assumptions and problems associated with CAPM.

Week

8

Module 3: Portfolio Optimisation

5h

Unit 2: Portfolio Optimization

5 study hours

•Explore the history of portfolio optimization.
•Identify different methods of portfolio optimization.
•Understand optimization constraints, including regulation, taxes, and transaction costs.
•Learn about the mathematical tools used in portfolio optimization.

Week

9

Module 3: ASSET PRICING, PORTFOLIO OPTIMISATION AND RISK MANAGEMENT

5h

Unit 3: Risk Management

5 study hours

•Define the concept of risk and its sources.
•Differentiate between business risk and financial risk.
•Understand investment return over multiple periods.
•Discuss risk premiums and risk aversion.

Week

10

Module 2: Basic Financial Assets and Related Issues: Bonds

4h

Unit 1: Bonds

4 study hours

•Review the types of bonds and their features.
•Practice reading bond tables and interpreting yield information.
•Solve numerical problems related to bond pricing and yield calculations.

Week

11

Module 2: Basic Financial Assets and Related Issues: Stocks

4h

Unit 2: Stocks

4 study hours

•Review the advantages and disadvantages of stock ownership.
•Analyze the factors affecting stock prices and returns.
•Discuss the different types of common stock and their characteristics.

Week

12

Module 3: Asset pricing,

4h

Unit 1: Asset pricing

4 study hours

•Review the key concepts of CAPM and its applications.
•Practice calculating asset-specific required returns using CAPM.
•Discuss the limitations and criticisms of the CAPM model.

Week

13

Module 3: ASSET PRICING, PORTFOLIO OPTIMISATION AND RISK MANAGEMENT

4h

Unit 3: Risk Management

4 study hours

•Review the different types of investment risks and their impact on portfolio returns.
•Discuss strategies for managing and mitigating investment risks.
•Analyze case studies of risk management in real-world scenarios.

This study schedule is in beta and may not be accurate. Please use it as a guide and consult the course outline for the most accurate information.

Course PDF Material

Read the complete course material as provided by NOUN.

Access PDF Material

Study Tips & Exam Preparation

Expert tips to help you succeed in this course

1

Create a detailed study schedule allocating specific time slots for each module and unit.

2

Focus on understanding the underlying assumptions and limitations of the CAPM model.

3

Practice solving numerical problems related to bond valuation, stock pricing, and portfolio optimization.

4

Review past assignments and tutor-marked assignments to identify areas of weakness.

5

Create concept maps linking key concepts from different modules to reinforce understanding.

6

Form a study group with peers to discuss challenging topics and exchange insights.

7

Prioritize studying the units identified as peak difficulty periods.

8

Review relevant formulas and equations, ensuring you understand their application.

9

Practice time management techniques to efficiently answer exam questions.

10

Focus on understanding the practical implications of financial theories in real-world scenarios.

Related Courses

Other courses in Sciences that complement your learning

Global Environmental Issues

Numerical Analysis I

Linear Algebra

View All Sciences Courses