FIN1FOF: Fundamentals of Finance - Solutions

Finance defines the process by which individuals and businesses raise and manage funds. Financial skills are a prerequisite for success not only if you are seeking a career in banking and finance, but equally for success in any business career. Indeed, financial literacy is a skill required to successfully manage your personal financial well-being. In this subject, through lessons in our financial trading room and industry-related content, you will examine the nature of the financial environment and the types of financial decision-making required to succeed, both from a business and an individual perspective. You will develop an understanding of the concept of the time value of money, methods of valuing various financial assets such as shares and bonds, and methods of project evaluation. You will consider the trade-off between risk and return in relation to investment assets, and its importance in understanding portfolio theory, and the cost of capital for a business.  Finally, you will be able to define a study plan and potential financial career paths.

✔ On successful completion you will be able to:

• Apply the concept of the time value of money to the valuation of annuities, perpetuities, bonds and equity securities.
• Compare the sources of finance available to a business and estimate the cost of capital, cash flows and financial viability of different investment projects.
• Apply statistical techniques, the capital asset pricing model and modern portfolio theory to analyse and compare the risk-return characteristics of investment portfolios.
• Describe the current financial environment and define a study plan and potential career path.