Explain learning outcomes of financial management

By the end of this subject guide as well as having done the relevant readings and activities you should be able to

• Converse why financial systems exist and how they are structured.''

• Describe why the relative importance of financial intermediaries and financial markets is different around the world and how bank-based systems differ from market-based systems.

• understand why financial intermediaries exist as well as discuss the role of transaction costs and information asymmetry theories in providing an economic justification.

• explain why banks require regulation and illustrate the key reasons for and against the regulation of banking systems.

• discuss the major types of risks faced by banks, and use the main techniques employed by banks to manage their risks.

• describe how to value real assets and financial assets and use the key capital budgeting techniques (Net Present Value and Internal Rate of Return).

• describe how to value financial assets (bonds and stocks).

• understand how risk distress the return of a risky asset and hence how risk affects the value of the asset in equilibrium under the fundamental asset pricing paradigms Capital Asset Pricing Model and Asset Pricing Theory.

• Talk about whether stock prices reflect all available information, and evaluate the empirical evidence on informational efficiency in financial markets.