IC205: Introductory Econometrics for Finance

Module code: IC205

Module provider: ICMA Centre; Henley Business School

Credits: 20

Level: 5

When you'll be taught: Semester 2

Module convenor: Dr Lisa Schopohl, email: l.schopohl@icmacentre.ac.uk

Pre-requisite module(s): BEFORE TAKING THIS MODULE YOU MUST TAKE IC104 OR ( TAKE MM1F28 (Compulsory)

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: na

Academic year: 2024/5

Available to visiting students: Yes

Talis reading list: No

Last updated: 19 November 2024

Overview

Module aims and purpose

Building on the Introductory Quantitative Techniques for Finance module, this module aims to give students a solid understanding of the econometric approaches that are commonly employed to test financial theories. It introduces students to the econometric techniques that are used in the empirical finance literature. Students will apply these techniques using an econometric software package and they will be analysing real-world data to answer questions in finance.

This module contains a Career Management Skills component which will enable students to  

• Develop self-awareness in the context of career decision making  
• Learn about potential career paths they can pursue in financial services  
• Practice research, networking and informational interviewing  
• Reflect upon their learning and determine next steps for their development 
• Appreciate the need for continuing professional learning and development throughout their career

Module learning outcomes

By the end of the module, it is expected that students will be able to:

• explain and critically discuss the fundamentals of the econometric techniques employed to estimate and test econometric models and how they are applied in empirical finance;
• formulate and validate econometric models testing financial theories and hypotheses and interpret the results from an estimated econometric model;
• assess and articulate skills, interests, values and personality traits in the context of career decision making (self-awareness)
• conduct research into companies and job roles and critically reflect on the need for continuing professional learning and development throughout their career

Module content

Module content

• Introduction to Econometrics
• Classical Linear Regression Model (CLRM)
• Assumptions of the CLRM
• Multiple Linear Regressions
• Hypothesis Testing for single and multiple hypotheses
• Goodness of Fit Statistics
• Violations of the CLRM Assumptions: causes, consequences, solutions
• Formulating Econometric Models

Structure

Teaching and learning methods

The module will be primarily lecture-based with directed textbook based supplementary reading. There will be a number of tutorial/seminar sessions – both classroom-based and computer lab-based – to aid students in developing more in-depth understanding about the linkage between topics and in applying the econometric techniques using econometric software. The interactive career workshops will introduce students to practical topics related to their professional development.

This module may be taught in a different Semester if you are studying at our campus in Malaysia.

For students studying at our campus in Malaysia: This module may be taught in a different semester and the breakdown of study hours may differ to those set out in the Study Hours table (please refer to the Module Handbook for the correct breakdown). In addition, you will be required to complete an additional 40 hours of study, taking the total number of study hours to 240 for this module. This is to comply with the Malaysian Quality Agency (MQA).

Study hours

At least 36 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

40% weighted average mark

Summative assessment

Penalties for late submission of summative assessment

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for that piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of three working days;
• the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three working days after the original deadline (or any formally agreed extension to the deadline), no penalty shall be imposed;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three working days of the deadline (or any formally agreed extension of the deadline): no penalty will be applied;
• where the piece of work is submitted more than three working days after the original deadline (or any formally agreed extension of the deadline): a grade of Fail will be awarded.

The University policy statement on penalties for late submission can be found at: /cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Weekly MCQ-based practice tests of the econometric concepts on Blackboard.

Career Management Skill: Engagement with the workshops / classes

Reassessment

Additional costs