Investments and Portfolio Management


CommunicationProblem SolvingResearchQuantitativeProfessionalism


The aim of this module is to equip financial managers with the analytical tools to make sound investment decisions. The module is designed to be taught at an intermediate level and builds-up on the finance knowledge acquired in modules such as corporate finance or business finance.

Learning Outcomes

By the end of this module the student should be able to:

1.  Critically evaluate the benefits and limitations of investments in securities such as stocks, bonds and derivatives.

2.  Demonstrate the ability to apply portfolio theory in decision making.

3.  Critically evaluate the behavioural finance critique.

Indicative Content

1 The Investment Environment

The risk-return trade-off and the efficient pricing of financial assets are central to the investments process. The role of financial markets and their degree of efficiency is an important factor to support investors.

2 Fixed-Income Securities

Debt securities are often called fixed-income securities because they promise either a fixed stream of income or one that is determined according to a specified formula. These securities have the advantage of being relatively easy to understand because the payment formulas are specified in advance and there is no uncertainty about the size and time of their payments.

3 Equity Valuation

The price of a stock depends on the dividend and earnings that can be expected from the firm. In analysing a firm’s prospects, it often makes sense to start with the broad economic environment, examining the state of the aggregate economy and even the international economy. This analysis combined with the appropriate equity valuation model provides the guidance to the investor to operate in financial markets.

4 Portfolio Theory and Practice

Introduction to Risk, Return and the Historical Record. Risk Aversion and Capital Allocation to Risky Assets. Optimal Risky Portfolios.

5 Options, Futures and Other Derivatives

Introduction to Option Markets. Option Valuation. Futures Markets. Futures, Swaps and Risk Management.

6 Behavioural Finance and Technical Analysis

Understanding the behavioural critique. Technical Analysis and Behavioural Finance.

Statement on Teaching, Learning and Assessment

Teaching and learning in the module will be highly interactive. The module will use lectures and tutorials. While lectures provide the input on key concepts, principles, themes and theories; tutorial classes are designed for discussion and analysis of the key issues and the application of knowledge gained from the lectures and independent study. This module will be taught at an intermediate level. Thus, we expect more proactive participation in the learning process through classroom discussions. Proactive and independent learning, alongside the organised lectures and tutorials, will enable students to make the most of this module. Students will be guided to learn to act as decision-makers and problem-solvers, tackling complex issues using creativity and considered judgement.

Teaching and Learning Work Loads

Total 200
Lecture 28
Tutorial/Seminar 10
Supervised Practical Activity 0
Unsupervised Practical Activity 0
Assessment 50
Independent 112

Guidance notes

Credit Value – The total value of SCQF credits for the module. 20 credits are the equivalent of 10 ECTS credits. A full-time student should normally register for 60 SCQF credits per semester.


We make every effort to ensure that the information on our website is accurate but it is possible that some changes may occur prior to the academic year of entry. The modules listed in this catalogue are offered subject to availability during academic year 2019/10 , and may be subject to change for future years.