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University of Exeter Business School

Principles of Finance

Module titlePrinciples of Finance
Module codeBEAM072
Academic year2023/4
Module staff

Dr Yao Chen (Convenor)

Duration: Term123
Duration: Weeks


Number students taking module (anticipated)


Module description


This module (Principles of Finance, BEAM072) aims to convey to students the core concepts of modern finance and equip them with the basic tools underlying contemporary financial management.  The course provides a solid foundation in selected areas of financial economics: asset pricing and corporate finance.  After introducing the concept of Time Value of Money we cover the valuation of bonds or fixed-income securities and equities.  The course then moves to portfolio theory and the capital asset pricing model. Finally, it turns to capital budgeting techniques and concludes with an overview of the efficient market hypothesis. If time permits, issues related to capital structure and dividend policy may be covered.

Additional Information:


Investment theory and corporate finance are international by nature and the principles taught can be applied in any country.

External Engagement

The module is linked with various professional bodies like CISI (Chartered Institute of Securities and Investment) and CFA (Chartered Financial Analyst Institute).


This module covers many different aspects of finance and prepares students for employment in different financial sectors. Students acquire quantitative skills, analytical skills, use of calculators and spreadsheets, problem-solving, team-working, and communication skills.


The entire module is about the fair valuation of financial assets which is of interest to those involved in sustainability.

Access to sources of financial data and financial information, lectures, and case study material is available for all students online.

Module aims - intentions of the module

The module aims to introduce students to the subject of financial management. In particular, the module provides students with a critical understanding of the basic principles of risk and return in financial markets, and their implications for the financial decisions made by both investors and corporations, including portfolio construction, capital budgeting, and the analysis of fixed income securities and equities. Through a combination of lectures and tutorial classes, students will be provided with a solid foundation in financial theory and practice, providing the necessary grounding for further modules in finance.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

  • 1. explain the concepts of risk and return in financial markets;
  • 2. analyse and use models of portfolio diversification and asset pricing;
  • 3. explain the principles of valuing bonds and bond portfolios;
  • 4. describe the concept of the risk, return, the idea of diversification of risk and the return and the pricing of capital assets;
  • 5. describe the efficient markets hypothesis and its central role in investigating the working of financial markets;
  • 6. illustrate and discuss the efficient markets hypothesis and its central role in investigating the working of financial markets;
  • 7. understand and discuss the role of capital structure and dividend policy (if time permits).

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

  • 8. develop theoretical arguments based on analytical reasoning;
  • 9. rigorously analyse problems in finance;
  • 10. interpret financial data and problems in the light of established theories.

ILO: Personal and key skills

On successfully completing the module you will be able to...

  • 11. plan and manage self-study;
  • 12. make appropriate use of learning resources;
  • 13. critically analyse problems arising in both academic and practical contexts.

Syllabus plan

  •  Introduction
  •  Time Value of Money and Valuation of Fixed income securities
  •  Equity Valuation
  •  Risk, Return and Portfolio Theory
  •  Capital Asset Pricing Models
  •  Capital budgeting
  •  The Efficient Markets Hypothesis
  •  Capital structure and Dividend policy (time permitting)

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning and Teaching Activity22Lectures
Scheduled Learning and Teaching Activity11Seminars
Guided Independent Study117Reading, preparation for classes and assessments

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Seminar Problems3 hrs of independent study / 1 hr in-class discussion1-13Suggested solutions
Mock exam2 hours1-13Suggested solutions
ELE quiz40 mins1-7Suggested solutions

Summative assessment (% of credit)

CourseworkWritten examsPractical exams

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Written examination1002 hours1-13Feedback and comments on ELE

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Final Written Examination (100%)Written examination (100%) (2 hours)1-13August Reassessment Period

Indicative learning resources - Basic reading

Berk, J. and P. DeMarzo, 2014. Corporate Finance, 3rd (Global) Edition, Harlow, Essex: Pearson Education Limited.

Indicative learning resources - Web based and electronic resources

To be given during lectures

Indicative learning resources - Other resources

To be given during lectures

Key words search

Principles of Finance, Financial management; Portfolio theory; Asset pricing; Fixed income securities; Cost of capital; Capital budgeting; Efficient Markets


Credit value15
Module ECTS


Module pre-requisites


Module co-requisites


NQF level (module)


Available as distance learning?


Origin date


Last revision date