MSc Risk Management & Financial Engineering: Electives

If you aspire to be a quantitative analyst in the equity derivative area, this module is a must. It will challenge you to expand your knowledge beyond the Black-Scholes model and apply quantitative tools to the pricing of exotic options. The module will introduce some of the more technical and theoretical aspects of option pricing.

This is an advanced elective in investments and portfolio management. You will discuss the key trading strategies used by hedge funds and demystify the secret world of active investing. The module combines the latest research with real-world examples and explores several different strategies in depth, including fundamental tools for investment management, dynamic portfolio choice, equity strategies, macro strategies, yield curve logic and arbitrage strategies.

This elective takes the key mathematical models in finance and develops the numerical methods used to solve them using C++. The numerical methods you will study are: Monte Carlo simulation, binomial trees, finite differences, convey optimisation and eigenvalue methods. You will learn about the financial models and discuss how to effectively design a numerical method using object oriented techniques.

You will have the opportunity to directly work on practical examples requiring hands-on interaction with the programming language.

This module provides you with a broad perspective of credit risk. You will study how to assess credit risk associated with individual exposures, and discuss major literature in the field and some related applications. The module also covers aspects of univariate or single-exposure risk and investigates the pricing of defaultable bonds and single named credit derivatives.

Fixed income securities make up a very substantial proportion of all investments and financing strategies in today’s financial markets. The need to price and hedge this array of products accurately has led to a prolific literature in the area. The module covers the main continuous-time term structure models and valuation techniques.

This module provides an introduction to the main issues involved in insurance markets: What are the drivers of demand and supply for general insurance and life insurance? What is risk pooling and risk transfer by insurers and reinsurers? What are the motives for individual and corporate insurance demand? How do risk coverage and saving interact in life insurance? How do insurers reinsure their risks? What are the limits of insurability? What are the corporate Alternative Risk Transfer mechanisms? What are the effects of asymmetric information between insurer and policyholders?

This course focusses on methods for quantitatively analyzing text data, such as newspaper articles, social media posts, political speeches, and company product descriptions. The amount and availability of such data is growing rapidly, and extracting valuable information from it is an important challenge. In recent years, numerous machine learning methods have been developed for text. This course will introduce students to these methods, but of equal importance will be to discuss their application to problems in economics and finance.

This module aims to provide students with more advanced tools of time series and econometrics than the Financial Statistics module. Applications to asset pricing and risk management will also be covered.

This module provides insight into financial trading strategies from an industry practitioner’s perspective. The module covers the wide spectrum of strategies across asset classes and hedge fund styles with an emphasis on investment /arbitrage opportunity and risk management. The module also includes quantitative pricing models with backtesting in Python across different market regimes. The module aims to study trading strategies in a non-technical intuitive manner using a “first principles” approach.

In this elective you will analyse banks’ main risks and activities on both their assets and liabilities, including off-balance sheet risks and financial globalisation, with special emphasis on the effects and implications of bank regulation and monetary policy. You will also study issues such as the determinants and consequences of financial crises and come to understand interactions between financial globalisation and banks.

Over the past few years, there has been an explosion of interest in the use of large datasets and new empirical techniques to make financial decisions of all kinds. In this elective we examine how the combination of large datasets, empirical techniques including machine learning, and insights from behavioural finance are helping in making more efficient financial decisions. Two areas in which progress has been especially rapid are credit analytics (predicting default in personal loans, mortgages, and firms), and asset management. This elective focuses on these specific markets, considering them from supply, demand, and regulatory perspectives. You will build empirical models to illustrate important concepts throughout the elective.

Big Data in Finance II builds on and complements insights from Big Data in Finance I. The module will focus on three key techniques in Big Data analysis and machine learning, and their applications to finance. First, we explore unsupervised machine learning models (e.g. clustering algorithms) and their applications to recommendation algorithms in finance. Second, expanding the introductory material on neural networks in Big Data in Finance I, the module will develop this material further to cover Deep Learning techniques, which will then, as in Big Data in Finance I, be applied to credit scoring and/or portfolio choice problems. Third, the module will introduce and discuss reinforcement learning models, with potential applications to portfolio selection and trading strategies.

This module will empower you with an understanding of blockchain / distributed ledger technology from first principles, opportunities and challenges the innovation presents. At the end of the module, you will be equipped with the skills necessary to use blockchain technology to optimise existing processes, innovate business models and create new markets.

This module will first provide an overall review and estimates of global climate finance requirements based on a range of sources going from global estimates to national, sectoral and project levels. The module looks at different types of climate mitigation and adaptation projects to understand how they address specific climate challenges. Looking at the range of financing instruments including both traditional and innovative instruments for large and small projects. The module will include a review of financing sources, both private and public, the project cycle and complementary activities to financing such as policy advice and technical assistance.

The objective of the module is threefold. First, to give students an introduction to current corporate governance practice. The main issues in corporate governance and stewardship that are discussed among policymakers, corporations, investors and scholars from law, finance and economics will also be covered. The topics will be discussed from an international comparative perspective. Second, to familiarize students with analytical tools used by corporate governance analysts. Third, to illustrate how practical corporate governance and stewardship challenges, like crises, mismanagement or activist shareholder interventions can be addressed and resolved.

The course will introduce some basic economic concepts and tools for analysing the interplay of conflicting interests of management, the board, different types of shareholders and other interested parties; in particular, agency theory and the economics of financial contracting. Empirical tools include event study analyses, regression discontinuity design (RDD) and metrics of firm performance (Q, returns, etc.).

Entrepreneurial Finance is designed primarily for students who plan to get involved with a new venture at some point in their career - as a founder, early employee, advisor or investor. This elective is also appropriate for students interested in gaining a broader view of the financing landscape for young firms, going beyond the basics of venture capital and angel financing.

Entrepreneurial Finance introduces students to the myriad complexities of evaluating and financing young, high potential ventures, with specific introduction of frameworks, tools, deal terms, and varying sources of capital. Through a combination of lectures, case studies, and mock negotiations, this course will help demystify the fund-raising process by addressing key questions facing all entrepreneurs: When should I raise money? How much? From whom? Under what terms? And what are the longer-term implications of my chosen financing strategy?

This module introduces modern methods of enterprise risk management applicable for financial organisations, including insurance companies and pension funds. It analyses different types of risk and methods for measuring and managing them before examining how insurance companies and pension funds implement risk mitigation techniques.

Foreign exchange (FX) is not only the most heavily traded of all financial assets, it has the clearest interface between macroeconomics and finance. This module will introduce you to the main theoretical models used to understand FX markets as well as in-depth analysis of their work.

Financial technology, also known as FinTech, is an emerging economic industry composed of companies that use technologies such as blockchain, machine learning and AI, to make financial services more efficient, secure and transparent. The FinTech ecosystem includes not only start-up challengers but also incumbent financial institutions seeking to innovate, as well as technology firms entering from outside of the financial industry. This course aims to provide insights into the FinTech revolution, including the nature of the disruption, innovation opportunities and strategic options. We will explore the FinTech landscape, at the same time delve into specific FinTech cases through the case teaching methodology. In this course we will also invite practitioners as guest speakers from varying FinTech sectors to shed light on first-hand industry developments and challenges.

This module will introduce you to big data analysis using machine learning techniques. You will utilise machine learning methods to use computational textual analysis and empirical modelling to quantify trends and sentiment in big data.

Trading is a crucial part of the investment process, The topic of the module is liquidity and price formation on securities markets

This elective allows you to apply key principles of private equity and venture capital to the financing of leveraged buyouts and early-stage ventures. The elective teaches students how to apply what they have learned in class to real life work situations by inviting inspiring speakers to present on campus throughout the module. The guest speakers come from various areas in the industry and discuss how they make transactions in real-life and what their roles entail on a daily basis.

This new module is an introduction to real estate investment analysis from the perspective of an investor. It emphasises both the teaching of the theory of real estate investment and real estate markets as well as teaching the practical methods and their implementation as used in a modern professional investment context.

This module provides an in-depth analysis of credit and equity derivative products. We focus on corporate derivatives and cover the most important products, which serve as building blocks for structuring customised and sophisticated products.

Explore current developments and trends in sustainable finance & investment, with a special focus on capital markets, institutional investment and emerging markets.

This module aims to introduce you to areas of financial planning that are more specific to private wealth management. It will introduce you to the types of client, and their respective investment needs and look at issues such as succession planning and multi-jurisdiction tax planning. Finally it examines the role of alternative investments (hedge funds, real estate and private equity) in building a diversified investment strategy.