MA Public Opinion and Political Behaviour
Postgraduate Diploma Mathematics and Finance options

Year 1, Component 06

Option(s) from list
Derivative Securities

Master the pricing of financial derivatives and their use for hedging financial risks. You study the basics of futures and options, analyse the Black-Scholes and binomial option pricing models, and consider various numerical techniques for pricing financial derivatives. Futures and options are then utilised in the context of hedging financial risks, and you are introduced to the concept of volatility trading and the treatment of volatility as an asset class.

Asset Pricing

Gain a formal introduction to asset pricing theories and empirical findings. You review the fundamental theories of the expected utility, asset pricing kernels, and risk-neutral valuation, covering the Capital Asset Pricing Model (CAPM), and linear factor models arising from the Arbitrage Pricing Theory (APT). You also discuss empirical asset pricing studies.

Financial Modelling

Consider the use of modern econometric techniques in the analysis of financial time series. You cover multivariate models for stationary and non-stationary processes, such as Vector Autoregressive models, consider appropriate models for volatility, and study Markov processes and simulation methods used for financial modelling.

Big Data in Finance

Big data - where datasets are so large they cannot be processed using traditional techniques – is useful to financial organisations. This module explores how to analyse big data and covers areas such as predictive analytics, risk modelling and corporate finance. You also learn about the application of data analytics in high frequency finance, fraud and personal finance.

Finance Research Techniques Using Matlab

This module introduces Matlab, software commonly used in financial organisations and academia to model portfolio construction and solve banking and finance challenges. You learn how to use Matlab programming language to solve financial problems. These may include finding optimal portfolio weights, calculating and simulating derivative prices and implied volatilities, and estimating and simulating GARCH models, amongst others.

Bank Strategy and Risk

Analyse the key strategic developments in banking and the main aspects of risk management in modern banks. You are introduced to the concept of shareholder value in banking, the main banking strategies to create shareholder value, the key risks in banking, and the most important tools required to manage bank risks.

Machine Learning

Humans can often perform a task extremely well (e.g., telling cats from dogs) but are unable to understand and describe the decision process followed. Without this explicit knowledge, we cannot write computer programs that can be used by machines to perform the same task. “Machine learning” is the study and application of methods to learn such algorithms automatically from sets of examples, just like babies can learn to tell cats from dogs simply by being shown examples of dogs and cats by their parents. Machine learning has proven particularly suited to cases such as optical character recognition, dictation software, language translators, fraud detection in financial transactions, and many others.

Finance and Financial Reporting

What instruments are used by companies to raise finance and manage financial risk? What is the role of financial institutions operating in financial markets? What are the techniques of financial accounting? How do you use spreadsheets in financial analysis? Examine and develop the concepts and elements of corporate finance.

Group Theory

Group theory is the study of symmetries, which are the actions that rotate polyhedrons such as the cube and they permeate science at large, playing an important role in physics (such as the standard model of particle physics ), chemistry (molecules, crystals, materials science…), cryptography or even music! In this module you will learn advanced constructions and techniques in modern group theory, with special emphasis on the study of finite groups.

Combinatorial Optimisation

In this module you will learn what underpins the algorithms used where variables are integer and apply these algorithms to solve integer and mixed integer problems with cutting-plane algorithms.

Advanced Ordinary Differential Equations and Dynamical Systems

The subject of Ordinary Differential Equations (ODEs) is a very important and fascinating branch in mathematics. An abundance of phenomena in physics, biology, engineering, chemistry, finance and neuroscience to name a few, may be described and studied using such equations. The module will introduce you to advanced topics and theories in ODEs and dynamical systems.

Bayesian Computational Statistics

What do you understand about Bayes’ theorem and Bayesian statistical modelling? Or about Markov chain Monte Carlo simulation? Focus on Bayesian and computational statistics. Understand the statistical modelling and methods available. Learn to develop a Monte Carlo simulation algorithm for simple probability distributions.

Partial Differential Equations

This module will cover partial differential equations (PDEs), which can describe a majority of physical processes and phenomena. You will learn the properties of first and second order PDEs, the concepts behind them and the methods for solving such equations.

Dynamic programming and reinforcement learning

Are you interested in understanding how AlphaGo was able to beat a top Go player? In this module, you will learn about the models behind successful stories of Reinforcement Learning, where a machine (agent) makes sequential decisions to reach an optimal goal. The lectures will be complemented with Lab sessions where we will take advantage of the Open AI Gym environments, allowing us to train our agents to perform tasks such as playing videogames (Atari) and more.

At Essex we pride ourselves on being a welcoming and inclusive student community. We offer a wide range of support to individuals and groups of student members who may have specific requirements, interests or responsibilities.

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