MSc - Financial Economics

Course details

The proposed Master of Science in Financial Economics (MSFE) programme addresses the need for a rigorous curriculum linking economics and econometrics to finance. The MSFE programme aims to combine two central strengths of SMU " econometrics and finance " in a programme that meets the loud industry demand for professionals with the skills for deep analysis of increasingly complex financial problems in a new era of dynamic policy and regulation.

Modules

Econometrics (MSFE, 1 unit)
This is an advanced introduction to econometrics. It covers the commonly used models and methods in econometrics, including the linear regression model and OLS, FGLS, IV, MLE, limited dependent variables (logit, probit, Poisson) with computer implementation using real and simulated data.

Financial Econometrics (MSFE, 1 unit)
The application of econometric methods to the characterisation of financial data, and to the estimation and testing of selected models of modern finance theory. Areas to be covered include: the statistical modelling and forecasting of financial time series, with application to share prices, exchange rates and interest rates; market microstructure; the specification, estimation and testing of asset pricing models including the capital asset pricing model and extensions; the modelling of volatility; practical application of volatility forecasting; and estimating continuous time models.

Computational Statistics in Finance (MSFE, 0.5 units)
This course exposes the students to concepts of modern data analysis. This builds on a basic knowledge of introductory statistics and probability theory including elementary notions of random variables and statistical inference, and some exposure to linear algebra. We will develop both classical and simulation-based methods of computational statistics in financial data analysis.

Empirical Finance (MSFE, 1 unit)
This course will introduce key empirical research methodologies in financial economics. It will illustrate the use of econometric methods in analysing financial data, such as stock and bond prices, interest rates, foreign exchange rates, commodity and futures prices and option prices.

Microeconomics (MSFE, 1 unit)
This course is a graduate-level introduction to microeconomics. The objective is to provide students with a sound grounding in the analytical methods of microeconomic theory used by economists. The course focuses on classical theories of consumer and producer behaviour and on the theory of competitive equilibrium.

Macroeconomics (MSFE, 1 unit)
The aim of this course is to provide students with an in-depth knowledge of the macro-economy and of recent macroeconomic phenomena through exposure to modern dynamic macroeconomic models. The course also addresses the impact of policies on growth and development, the labour market, and the business cycle.

Corporate Finance (MSFE, 0.5 units)
This course aims to provide students with a basic understanding of corporate finance. Students will be exposed to key financial concepts and tools commonly used by managers in making sound financial decisions.

Specialisation Electives (programme, units)track

Financial Statement Analysis (MSFE, 0.5 units) applied
The course aims to equip students with an overview of accounting as the language of business as well as the ability to interpret and analyse a set of financial statements for assessing the operating performance and financial position of an entity.

Macroeconomic Foundations of Asset Pricing (MSFE, 0.5 units) applied and research
This course provides students with a foundational study of the economic concepts and theories necessary to understand and analyse the state and outlook of the global economy and their impact on financial markets.

Financial and Securities Regulation (MSFE, 0.5 units) applied
This course aims to give students a practical overview of the principles and statutory regime relating to the regulation of different industries.

Equity Analysis and Portfolio Management (MSFE, 0.5 units) applied
This module covers basic techniques of valuation and management of securities in a portfolio context. Valuation of stocks, models such as discounted cash flow models, P/E multiples, and alternative-pricing models will be covered.

Financial Advisors and the Law (MSFE, 0.5 units) applied
The course will consider the circumstances in which financial advisers may be legally liable for advice which turns out badly. Topics include liability in contract, how contracts are made, express and implied terms, possibility of limiting liability, remedies for breach of contract, liability in tort, negligence, scope of duty of care, fraud, remedies, liability in both contract and tort.

Topics in Time-Series Econometrics (MSFE/MSE, 0.5 units) research
This is an overview of time-series econometrics, designed to introduce students to a range of material in stationary and non-stationary time series, including unit root theory, state-space models, non-linear time-series analysis, and Bayesian time-series methods.

Derivative Securities (MSFE, 1 unit) research
Financial derivatives have applications across many areas of finance, such as hedging, swaps, convertible claims, and corporate decision making. The course objective is for students to understand profoundly the valuation of forwards, futures, options and other derivative securities, and their use in hedging risk exposures, such as commodity price risk, currency risk, interest rate risk, stock portfolio risk, and so forth.

Game Theory (MSFE/MSE, 0.5 units) research
This is an advanced course in game theory. Students will learn the mathematical foundations of non-cooperative and co-operative game theory, and be exposed to the application of game-theoretic models to various fields in economics, including labour economics, macroeconomics, international economics, social choice and industrial organisation.