Quantitative Methods

Module description

This module is intended for Financial Services Professional Degree Apprenticeship students who are looking to develop a sound knowledge in the quantitative concepts and applications that are fundamental to financial analysis. The quantitative methods introduced are widely used in securities and risk analysis.

Topics covered include the time value of money, data collection and analysis, elementary statistics, probability theory, probability distribution theory, sampling and estimation, hypothesis testing, and simple linear regression in financial decision-making.

Full module specification

Module aims

The aim of this module is to:

• Gain exposure to the quantitative concepts and techniques widely used in financial analysis and investment decision making.
• Develop a sound understanding of time value of money (TVM) and use it to make choices between different investments.
• Acquire an understanding of the acquisition and analysis of data including the necessary statistical concepts.
• Understand how probability can be used to frame and address many real-world problems involving risk.
• Learn how some of the more common probability distributions are used in investment analysis.
• Understand the two branches of statistical inference – estimation and hypothesis testing – and how to incorporate them into the analysis of investments.
• Perform simple linear regression analysis to aid in the understanding of the relationship between two variables and make predictions.

Skills acquisition: You will develop a range of transferable skills required in making investment decision in an environment of risk. 

Research in teaching: The module builds on recent investment management research within the finance disciplines to define decision making tools and theories.

The module is supported by a series of webinars, videos, group forums, learning logs, online reading material, and facilitated online group sessions will be offered in addition to masterclasses.

ILO: Module-specific skills

• 1. The mathematical building blocks needed for the quantitative analysis of investments are introduced.
• 2. An understanding of TVM from first principles is provided along with the more pragmatic approach to problem solving using your financial calculator.
• 3. The statistical and probability tools needed to start to understand a problem and analyse it. Some of the more common probability distributions are presented. One of the main applications of statistics - statistical inference is introduced (along with the central limit theorem) and used to estimate population parameters or to test hypotheses about them.
• 4. Linear regression is introduced – this is helpful in the examination of whether one variable (e.g. cash flow growth) is useful for explaining another variable (e.g. market value).

ILO: Discipline-specific skills

• 5. Application of the quantitative techniques learnt in all areas of your day to day activities.

ILO: Personal and key skills

• 6. Develop confidence in examining all sort of problems from the bottom up, in a systematic and convincing fashion.
• 7. Ability to critically examine research.
• 8. Provide solid, quantitative support to your decisions (which might be buying or selling an investment or persuading others to do so).

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

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

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

Re-assessment notes

Defer – as first time

Refer – capped at 40%

Syllabus plan

• The Time Value of Money
• Organizing, Visualizing, and Describing Data
• Probability Concepts
• Common Probability Distributions
• Sampling and Estimation
• Hypothesis Testing
• Introduction to Linear Regression

Indicative learning resources - Basic reading

• Quantitative Methods, CFA® Program Curriculum Level I Volume I, CFA Institute.
• Carlos Cortinhas, Ken Black (2014), Statistics for Business and Economics. Wiley.

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

• Quantitative Methods, CFA® Program Curriculum Level I Volume I, CFA Institute. 

Indicative learning resources - Other resources

As listed on ELE

Origin date

28/02/2019

Last revision date

23/06/2022