Investment Research Methods 2

Module description

The module focuses on further problems arising in econometric analysis for empirical research. It expands economic analysis to take in competing theories and policy implications of growth models. It develops themes in the use of accounting numbers, and the interpretation of different standards of financial reporting and disclosure.

Full module specification

Module title:Investment Research Methods 2
Module code:BEFM014
Module level:M
Academic year:2020/1
Module lecturers:
  • Mr Jamie Stevenson - Convenor
Module credit:15
ECTS value:






Duration of module: Duration (weeks) - term 2:


Module aims

This module adds to the material developed in Investment Research Methods 1 and Financial Statement Analysis. The first part covers quantitative valuation methods and the application of economic growth theory to markets and companies. The second part examines the analysis of assets, liabilities and the impact of alternative accounting methods on financial statements of profitability, liquidity and value. The third part highlights the techniques most frequently used by management to distort and obscure the accuracy of financial statements.

ILO: Module-specific skills

  • 1. Understand critically the limitations of standard regression-type models and offer appropriate solutions.
  • 2. Understand critically different theories of economic growth
  • 3. Analyse the policy implications in complex environments of various growth models
  • 4. Understand US GAAP and IAS rules for treatment of investments, business combinations, inventory, long life assets, tax liabilities & assets, pension & other post-retirement liabilities
  • 5. Analyse and adjust financial statements in line with accounting standards to achieve appropriate statements of comprehensive income and sustainable cash flow

ILO: Discipline-specific skills

  • 6. the ability to develop rigorous theoretical arguments based on mathematical and analytical reasoning;
  • 7. the ability rigorously to analyse problems in finance;
  • 8. the ability to interpret financial data and problems in the light of established theories;
  • 9. the ability to access a wide body of empirical research literature and critically appraise it;

ILO: Personal and key skills

  • 10. an ability to plan and manage his/her own study both individually and within a group;
  • 11. an ability to make appropriate use of learning resources, including sophisticated computer datasets;
  • 12. an ability to analyse critically problems arising in both academic and practical contexts;
  • 13. an ability to present effectively results and achievements of individual and collaborative projects as developed through the mode of instruction using both individual and group assignments.

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
Contact hours24Lectures
Contact hours12Tutorials

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
One piece of assessed work203000 words1-13Written feedback
Examination802 hours1-13Exam grade

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

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Assessed workResubmission (20%)1-13Aug/Sep
ExaminationExamination (80%)1-13Aug/Sep

Syllabus plan

• Economics & Statistics: Hypothesis testing;
• Correlation and regression;
• Multiple regression and issues in regression analysis;
• Growth and accumulation;
• Growth and policy;
• Analysing the firm’s environment;
• Accounting: Analysis of inter-corporate investments;
• Analysis of business combinations;
• Mergers, LBOs, divestitures and holding companies;
• Measuring accounting exposure;
• Analysis of multinational operations;
• Accounting bulletin #99;
• International Accounting Standards and US GAAP contrasted;
• Understanding retirement benefit accounting and disclosures for financial analysis;
• Accounting bulletin #69 Detecting lower earnings quality;
• Analysis of financial statements – a synthesis;
• Analysis of equity investments

Indicative learning resources - Basic reading

Quantitative Methods for Investment Analysis, Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, and David
E. Runkle (AIMR, 2001) The Analysis and Use of Financial Statements, 2nd edition, Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried (Wiley, 1998)

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