Principles of Finance

Develop your understanding of the rapidly evolving and exciting theory of finance

This Summer School course serves as an introduction to the core concepts in finance. You will learn the nature and workings of financial markets and their use by corporations, investors and others, and the relevance of theory for financial and investment decision making. You will acquire skills in modern valuation techniques, including the pricing of fixed-income securities, equities and derivatives.

By the end of the course you will develop an understanding of:

  • The basic principles of finance and finance theory; the time value of money, the notion of compound interest, the definition of the internal rate of return, the valuation of financial instruments and the perpetual growth model.

  • How to apply the criteria that companies use to make investment decisions.

  • The concepts of market efficiency, portfolio risk and diversification.

  • The principal functions of capital markets.

  • The distinct features of main financial instruments including debt, equity and financial derivatives.

  • The general principles of the pricing and use of financial instruments.

Course content

Week one

You will review bonds and money markets and how to assess credit risk. You will cover equity valuation and the Dividend Growth Model. You will also cover important concepts such as the risk and return trade-off and financial markets’ efficiency. You will also learn about systematic and unsystematic risk and the Capital Asset Pricing Model.

Week two

You will cover important topics in corporate finance such as how to value companies and investment projects and how to calculate the cost of capital. You will learn about financial leverage and the concept of optimal capital structure and how changes in capital structure impact the value of firms.

Week three

You will learn about the derivative market and cover the mechanics of Futures contracts such as margin requirements. You will also cover Option contracts. You will learn about the payoffs of Calls and Puts and about trading strategies that involve these contracts.

Teaching methods

Academic teaching for this course will be delivered synchronously online. The campus will be open and students are welcome to follow the course online from the Business School. Students will be able to network with peers from other courses and join the social programme.

Lecture content and class material

Lecture content and class material will be made available through an interactive online teaching and learning hub – The Summer School Hub.

Workshops will use case studies, structured discussions and in-class exercises to demonstrate the application of concepts as you learn. You will also be expected to complete private study and exam preparation work outside of your scheduled classes.

A guest speaker programme, with presentations from high profile financial institutions, will put the course material into a practical context.

Admissions

Academic level: Equivalent to an undergraduate course

Suggested credit level: 3 – 4 US / 7.5 ECTS credits. Your home institution will determine how much credit is awarded

Entry requirements: A level maths (grade B or above) or equivalent

For more details view our entry requirements.

Assessment

  • Multiple choice question quizzes – (30% of final mark)

  • 1 final individual examination – (70% of final mark)

Imperial College London will issue an official transcript with a final overall numerical mark – a breakdown of results will not be provided.
Imperial College London reserves the right to change or alter the courses offered without notice.

Key information

Duration: 3 weeks

Session dates: 28 June - 16 July 2021

Please note: applications for this course are now closed