Overview

The course content may be divided into three principal areas: liquidity management and capital markets, financial management, and risk management and treasury operations. The examination of liquidity management and capital markets considers the context for international cash and liquidity management such as financial and banking systems and the time value of money. It introduces core tools such as money markets and the foreign exchange market. The unit then proceeds to examine core concepts of equity and debt and introduces methods of raising finance in the capital markets. The examination of financial management investigates the raising of finance in further depth. An important element comprises detailed analysis of bond markets and credit ratings. The module then proceeds to review core corporate finance theory covering fundamentals of equity valuation, dividend policy and the payoff between risk and return for investors. Lastly, the module examines risk management and treasury operations to develop an understanding of the concept of risk management and the framework within which financial risks can be managed. It explains hedging alongside key aspects of generic risk management instruments, before proceeding to focus more closely on the management of interest rate and foreign exchange risks. The final section describes the treasury function, its organisation, policies, objectives and controls.

Assessment Strategy

Threshold C- to C+ (50-59%): Satisfactory performance. No major omissions or inaccuracies in the deployment of information/skills. Some grasp of theoretical/conceptual/practical elements. Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives. Knowledge of key areas/principles only. Weaknesses in understanding of some areas. Limited evidence of background study. Answer inadequately focused on task and with some irrelevant material and poor structure. Arguments presented but lack coherence. Minor factual/computational errors. Lacking original interpretation.

Good B- to B+ (60-69%): Good performance. Most of the relevant information accurately deployed. Good grasp of theoretical/conceptual/practical elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Evidence of the use of creative and reflective skills. Understands most but not all concepts/issues. Evidence of background study. Focused answer with good structure. Arguments presented coherently. Mostly free of factual errors. Some limited original interpretation. Well known links between topics are described. Problems addressed by existing methods/approaches. Good presentation with accurate communication

Excellent standard: 70+ An outstanding performance, exceptionally able. The relevant information is accurately deployed. Excellent grasp of theoretical/conceptual/practice elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Strong evidence of the use of creative and reflective skills.

Learning Outcomes

• Critically analyse the importance of cash and liquidity management in the context of banking operations

• Critically assess the importance of capital markets and treasury management in a contemporary context

• Critically evaluate alternative strategies and techniques applied in raising finance in the debt and equity markets

• Critically evaluate methods of equity valuation and issues surrounding dividend policy

• Critically evaluate the main roles and features of the treasury function and its relationship with other functions within banks

• Critically evaluate the uses, merits and performance of credit ratings, and analyse the complexity of current issues surrounding credit ratings

• Demonstrate the ability to make informed judgements in the use of money market and foreign exchange market instruments

• Identify, evaluate and apply appropriate techniques and methods relating to bond pricing, bond yields and duration

• Identify, evaluate and apply appropriate techniques and methods relating to interest rate and exchange rate risk management