Module

Quantitative Research Methods

Module description

This module provides students with a foundation in research methods used in finance. In particular, it introduces the fundamental quantitative techniques that are essential for a financial analyst or a fund manager, such as basic statistics, probability theory and regression analysis. Theory and techniques will be covered in the lectures, while in the tutorials students will work through numerical examples and financial applications.

Additional Information:

Internationalisation: This is a technical module on statistical tools for international financial research, which are applicable around world. This module also incorporates international examples with real financial data from countries such as the USA and the UK.

Sustainability: The methods covered in this course are used in many applications in finance, including research into environmental, social and governance issues and sustainable finance.

External Engagement: This module follows the CFA curriculum.

Employability: Students learn the basic statistical tools that can be used in investment research. This module also helps develop numerical and creativity skills, which are valuable skills for financial analysts and researchers.

Full module specification

Module title:Quantitative Research Methods
Module code:BEFM022
Module level:M
Academic year:2020/1
Module lecturers:
  • Dr Jane Shen - Convenor
Module credit:15
ECTS value:

7.5

Pre-requisites:

None

Co-requisites:

None

Duration of module: Duration (weeks) - term 1:

10

Module aims

The aim of this module is to introduce students to research methods commonly used in finance. In particular, it aims to develop students’ ability to select and critically evaluate the major tools of investment research, as they have been developed in current research.

ILO: Module-specific skills

  • 1. discuss, calculate and interpret descriptive statistics;
  • 2. use the basic probability tools needed to make investment decision;
  • 3. discuss, use and interpret different probability distributions commonly used in finance;
  • 4. demonstrate knowledge of basic concepts in estimation theory;
  • 5. construct and interpret point estimates and confidence intervals;
  • 6. use sample information to estimate population parameters, perform hypothesis tests and interpret the results;
  • 7. use and critically evaluate tools such as correlation analysis and regression analysis.

ILO: Discipline-specific skills

  • 8. develop rigorous theoretical arguments based on mathematical and analytical economic reasoning;
  • 9. analyse quantitative problems in finance;
  • 10. interpret financial data and problems in the light of established theories using quantitative methods;
  • 11. access a wide body of empirical research literature and critically appraise it.

ILO: Personal and key skills

  • 12. develop a range of skills required in conducting a quantitative investment research;
  • 13. critically analyse problems arising in both academic and practical contexts using statistical tools and methods.

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

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
401100

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Scheduled Learning and Teaching Activity27Lectures
Scheduled Learning and Teaching Activity11Tutorials
Scheduled Learning and Teaching Activity2Revision
Guided Independent Study110Reading and research, web-based activities

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Weekly Mini QuizzesEight weekly online tests1-7Online feedback
Mid-Term Mock Exam1 Hour1-6Online feedback
Weekly HomeworkEight weekly homework exercises1-1Online feedback

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
60400

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
Mid-Term Exam401 hour1-6, 8-9, 12Online feedback
Individual Assignment603000 Words1-3Written Feedback
0
0

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

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Individual AssignmentIndividual Assignment, 3000 words (60%)1-13August/September
Individual Mid-Term Exam 1 hour (40%)1-6, 8-9, 12August/September

Syllabus plan

    • Introduction to basic concepts: market returns and descriptive statistics
    • Some basic probability concepts.
    • Probability distributions commonly used in finance.
    • Estimating population parameters and constructing confidence interval.
    • Hypothesis testing.
    • Regression analysis and applications in finance.
    Dummy variables regressions

Indicative learning resources - Basic reading

Basic reading:

DeFusco, R.A., McLeavey, D.W., Pinto, J.E. Runcle, D.E. and Anson, M.J.P (2016), Quantitative Investment Analysis (3rd ed.). John Wiley & Sons.

Brooks, C. (2019), Introductory Econometrics for Finance (4th ed.). Cambridge University Press.

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

ELE – College to provide hyperlink to appropriate pages

Web based and electronic resources: all teaching materials will be available on ELE

Origin date

01/09/2004

Last revision date

19/08/2020