Investment

On successful completion of this module, students will be able to:-

INTRODUCTION TO INVESTMENT MANAGEMENT

• outline the roles of investment managers and trustees
• discuss institutional investment management, including pension funds, life assurance companies, and collective investment vehicles, the tax treatment to which they are subject, and relevant legislation and regulation
• discuss the nature and provision of individual investment management services
• discuss the investment management process

OBJECTIVES OF INVESTMENT MANAGEMENT

• identify specific objectives and constraints in relation to different clients
• explain the relationship between risk and return
• identify and understand the importance of different time periods: short, medium and long term
• identify approaches to investment analysis and investment management
• discuss strategic and tactical asset allocation and stock selection
• explain the basics of portfolio construction to include liquidity, security, and opportunity

PERFORMANCE MEASUREMENT

• explain measures of return
• evaluate methods of performance appraisal

MACRO-ECONOMICS

• explain how national income is determined, composed and measured in both an open and closed economy
• explain the stages of the economic cycle
• explain how exchange rates are determined
• be able to apply the effect of changing exchange rates on the activities of companies that operate internationally
• understand the pros and cons of European Monetary Union (EMU) and of the Euro
• explain the composition of the balance of payments and the factors behind and benefits of international trade and capital flows
• explain the nature, determination and measurement of the money supply
• explain the role, basis and framework within which monetary and fiscal policy operate
• explain the role of central banks and of the G8 group of nations
• explain how inflation and unemployment are determined, measured and their inter-relationship

MONEY MARKETS

• give an introduction to the money market
• define LIBOR
• describe different bills (trade, bank, and Treasury)
• give details of certificates of deposit (CDs) and commercial paper (CP)
• discuss the repo market

FIXED-INTEREST SECURITIES

• describe the features of bonds
• distinguish between and explain the significance of government bonds and corporate bonds including convertibles, domestic bonds, foreign bonds and eurobonds
• discuss the origin of gilt edged securities
• give details of the features of gilts
• explain the measures of yield: flat yield; gross redemption yield; and net redemption yield

SHARES

• define the different types of shares
• discuss merits and demerits of investing in equities
• outline the main objectives of investment analysis
• distinguish between types of asset analysis
• discuss the Efficient Market Hypothesis (EMH)

DERIVATIVES

• define and explain futures
• define and explain options
• define and explain warrants
• discuss types of swaps
• explain the uses of swaps
   

FOREIGN EXCHANGE

• explain and discuss exchange rates
• give details of exchange risk and current risk
• describe spot/forward markets

UK FINANCIAL-SERVICES REGULATION

• define the principal objectives of the Financial Services and Markets Act (FSMA) 2000
• explain which financial services are regulated under the Act
• explain the role of the Financial Services Authority
• define ‘Approved Persons’
• explain the ‘Statements of Principle for Approved Persons’
• outline the provisions of the FSA Handbook in relation to business standards, regulatory process, and redress

OTHER RULES AND REGULATIONS

• discuss capital adequacy and the protection of clients’ money and other assets
• discuss training, competence, the proper handling of complaints, and compensation