Page 16 - CAPE Financial Services Syllabus Macmillan_Neat
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UNIT 1
MODULE 1: INTRODUCTION TO FINANCIAL PRODUCTS AND SERVICES (cont’d)
SPECIFIC OBJECTIVES CONTENT
Students should be able to:
Risk structure of interest rates.
Teach students how to calculate interest rate
based on the various risk premia:
(a) default risk;
(b) liquidity; and,
(c) income tax considerations.
Term structure of interest rates
(a) Understanding and construction of the
Yield curve.
(b) Theories explaining the yield curve:
(i) expectation theory;
(ii) segmented market theory;
and,
(iii) liquidity preference theory.
15. *explain the various models for Involve students in simple calculations related
computing the price for common to stock prices:
stock and the theory of
expectation and efficient market (a) Computation of stock prices:
hypothesis; and,
(i) one-period valuation model;
(ii) generalised dividend
valuation model; and,
(iii) Gordon Growth Model.
(b) Rational expectations.
(c) Efficient market hypothesis.
CXC A38/U2/16 11
