MANG 2003
Ms Anita Krishnan
a.j.krishnan@soton.ac.uk
Building 2 Room 3011
Southampton Business School
Lecture 1
Objectives of financial accounting
Conceptual issues /conventions
Structure of financial statements
2
Recap
What is accounting objective?
3

Lecture 5
Portfolio Theory & Financial Markets
Shares
Dr Gerhard Kling
Contents
Value creation
Value drivers & forecasting
Alternative valuation methods
2
Dr Gerhard Kling
The main goal of an organisation is to create value
Value based management focuses

Lecture 1
Portfolio Theory & Financial Markets
Introduction to
financial
markets
Dr Gerhard Kling
Contents
What should you expect?
What are financial markets?
Basic concepts
2
Dr Gerhard Kling
Delivery and assessment
Lecture (2 hours)
Introduction to mai

Lecture 6
Portfolio Theory & Financial Markets
Risk & return
Dr Gerhard Kling
Contents
How to measure returns?
How to measure risk?
Diversification
2
Dr Gerhard Kling
Holding period return
The holding period is a length of time over which the assets perce

Lecture 3
Portfolio Theory & Financial Markets
Money market
securities &
bonds
Dr Gerhard Kling
Contents
Money market securities
Bonds
Term structure
2
Dr Gerhard Kling
Money market: an introduction
Money markets securities are securities with maturities

Lecture 4
Portfolio Theory & Financial Markets
Foreign
exchange
market
Dr Gerhard Kling
Contents
Foreign exchange markets
Theories of exchange rates
Arbitrage
2
Dr Gerhard Kling
Foreign exchange markets
The market for FX in London comprises 50 internation

Exercise 10
1. Diversification and the number of securities needed
Lets assume that there are N securities that have the same expected return , the
same volatility and they have the same correlation coefficient with all the N-1
securities.
You can hold as

Exercise 6
1. Mean and standard deviation
a) You observe the daily share price of a newly listed company (company A) for 15
days (see table below). Based on these daily observations, you are asked to derive the
expected return and volatility (standard dev

Exercise 7
1. Pricing of contingent claims
The following table contains the gross return of different contingent claims for
different states of the world. Security 1 has a price of 1.45, and security 2 has a price
of 1.
State
1
2
3
Security 1
1
0.8
1.8
Se

Exercise 9
1. Deriving the capital market line
In the economy there are two risk assets: A has an expected return of 6% and
volatility of 10%; B has an expected return of 9% and volatility of 15%. The
correlation between the two risky assets is 0.3. The e

Exercise 8
1. The global minimum-variance portfolio
You can invest in two different securities. Security A has a mean return of 6% and a
volatility of 10%, whereas security B has a mean return of 8% and a volatility of 15%.
The correlation between the two

Exercise 5
1. How to value a US retailer?
The Kroger company headquartered in Cincinnati, Ohio, is one of the largest grocery
retailers in the US, with fiscal 2007 sales of $70.2 billion.
Income statement, In USD million
2008
Operating Revenue /
Turnover

Exercise 2
1. Inflation and real estate investments
We want to understand how inflation (expected and unexpected) might affect
different types of investments and loans. To illustrate the issue, lets assume that we
invest in residential property in the UK.

Exercise 1
1. Mortgage meltdown
Selecting the right mortgage is not really that easy but based on the first lecture you
should have learned some useful tools to assess different mortgage offers. Now lets
see how it really works!
Halifax offers the followi

Exercise 3
1. Money market deposit (MMD)
The MMD has a face value (M) of 100,000, the annualised interest rate (d) is 7.5%,
it matures after 62 days.
a) Determine the amount of interest paid (R) and the maturity value (F).
b) Determine the effective rate

PTFM
PortfolioTheory&FinancialMarkets
ModuleOutline,2013
Thismodulefocusesonportfoliotheoryandfinancialmarkets. Themoduleaimsto
develop understanding of the role of financial markets, security analysis and
valuation,efficientmarkettheory,assetpricingtheor

Lecture 8
Portfolio Theory & Financial Markets
Portfolio theory
Dr Gerhard Kling
Contents
Return, risk & diversification
Efficient frontier
Capital Market Line
2
Dr Gerhard Kling
Why should we combine different securities?
A portfolio is a combination of

MANG2015W1
UNIVERSITY OF SOUTHAMPTON
SEMESTER 1 EXAMINATIONS 2013/14
FINANCIAL MANAGEMENT
DURATION: 125 MINUTES (2 HOURS 5 MINUTES)
This paper contains EIGHT questions.
Answer FIVE questions in total.
Answer at least TWO questions from SECTION A, and at l

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATIONS 2011/12
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions.
You must answer ONE question from Section A and
TWO questions from Section B.
All questions carry equal marks. Where quest

UNIVERSITY OF SOUTHAMPTON AM233W1
W
SEMESTER 1 EXAMINATION 2002/03
FINANCIAL MANAGEMENT
Duration: 120 mins
W
Answer THREE questions.
All questions carry equal marks. Where questions have more
than one part, the relative importance of each part is in

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATIONS 2007/08
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions, including
All questions carry equal marks. Where questions have more than
one part, the relative importance is indicated.

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATION 2006/7
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions
All questions carry equal marks. Where questions have more than one part,
the relative importance of each part is indicated.

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATION 2003/04
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions.
All questions carry equal marks. Where questions have more
than one part, the relative importance of each part is indicated

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATION 2004/05
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions.
All questions carry equal marks. Where questions have more than
one part, the relative importance of each part is indicated

UNIVERSITY OF SOUTHAMPTON MANG2015W1
SEMESTER 1 EXAMINATION 2005/06
FINANCIAL MANAGEMENT
Duration: 120 mins
Answer THREE questions.
All questions carry equal marks. Where questions have more
than one part, the relative importance of each part is indicated

UNIVERSITY OF SOUTHAMPTON
MANG2015W1
SEMESTER 1 EXAMINATIONS 2012-2013
FINANCIAL MANAGEMENT
DURATION: 120 MINUTES (2 HOURS)
This paper contains FIVE questions.
Answer THREE questions in total.
Answer Question ONE from SECTION A, and TWO Questions from
SEC

Optimization with equality constraints
Portfolio Theory & Financial Markets
Optimisation
with equality
constraints
Dr Gerhard Kling
Contents
Why do we need more maths?
Lagrange-multiplier method
Applications
2
Dr Gerhard Kling
Optimisation without constra

Lecture 2
Portfolio Theory & Financial Markets
The value of
time & risk
Dr Gerhard Kling
Contents
Interest rates & inflation
Liquidity premium
Risk premium
2
Dr Gerhard Kling
The price of time and risk
The rate of interest is the price of time and risk
N

Lecture 7
Portfolio Theory & Financial Markets
Decision making
under
uncertainty
Dr Gerhard Kling
Contents
Utility functions
Risk aversion
Expected utility maximisation
2
Dr Gerhard Kling
State space, contingent claims and returns
As we focus on decision