7SSMM712 Topics in Applied Finance Assessment Brief 2024-25 | KCL

7SSMM712 Module Overview 

This course provides an introduction to 3 distinct subjects in applied finance. 

The first part looks into wealth management applications. Examines the framework within which wealth management firms operate, the foundations for constructing wealth portfolios and the actual process of designing and implementing wealth management portfolios. 

The second part examines commodities as an asset class, discusses the various tradable commodities and their valuation and the link between commodities and investment portfolios, as well as the link between commodities and shipping.

The third part looks into international shipping. The dynamics of this industry, the determinants of supply and demand. Shipping finance, risk management for shipping and valuation of shipping companies. 

The module leaders - lecturers are experienced market practitioners with long experience (20+ years each) in their respective areas of expertise.

Reading List 

Core: 

CISI, Applied Wealth Management (3rd edition) 
CISI, Portfolio Construction Theory (3rd edition) 
M. Stopford, Maritime Economics, Routledge (3rd edition) 
N.C. Schofield, Commodity Derivatives - Markets and Applications, Wiley Finance 

Additional Reading: 

J. Butler, FT Guides: Wealth Management, Pearson 
H. Evensky, S.M.Horan & T.R. Robinson, The New Wealth Management, CFA Institute Series, Wiley
C.B. Beyer, Wealth Management Unwrapped, Rosetta Press 

Module Syllabus 

Lecture 1 14 - 01 -2025 

Introduction to the Module 

The wealth management process - from asset classes to portfolios - portfolio risk and return. 
Introduction to commodities and shipping. 
Links between wealth management, commodities and shipping. 
Reading: CISI Portfolio Construction Theory, Edition 3, Chapter 1

Lecture 2 21 - 01 -2025 

Client Information Gathering 
Wealth Management Regulatory Framework 
Money Laundering 
Seminar: Client Profiling Questionnaires 
Reading: CISI Applied Wealth Management, Edition 3, Chapters 1,2 & 3 

Lecture 3 28 - 01 -2025 

Asset Classes: Cash and Fixed Income 
Discretionary and Advisory Services 
Description, properties and risks of cash and money market instruments, FX and bonds. 
Seminar: Properties, pricing and risks of cash, money markets and bonds Reading: CISI Portfolio Construction Theory, Edition 3, Chapter 2 
CISI Applied Wealth Management, Edition 3, Chapter 6 

Lecture 4 04 - 02- 2025 

Asset Classes: Equities, Property & Alternatives 
Theory: Properties, valuation and risks of equities, property and alternative Investments 
Hedge Funds, Private Equity, Derivatives and Alternatives 
Seminar: Exercises on the properties, pricing and risks of equities, property and hedge funds 
Reading: CISI Portfolio Construction Theory, Edition 3, Chapter 2 
CISI Applied Wealth Management, Edition 3, Chapter 6 
J. Pearson, The FT Guide to Wealth Management, Pearson, Chapter 7

Lecture 9 18 - 03 - 2025 

Credit Analysis in Shipping 

Review of the main interaction of risk-return for banking institutions, and how this determines the terms of loans offered. Main banking terms for standard mortgage financing in shipping. Review Terms Sheet. 

Use economic analysis (agency theory, option theory) to explain the main features of banking terms. Equity vs debt valuation of shipping companies 

Seminar: Microsoft Excel applications to structure credit exposure 
Reading: M. Stopford, Maritime Economics, Routledge, 3rd edition 

Lecture 10 25 - 03 - 2025 

Risk Management in Shipping 

Theory: Market Exposure and Hedging. Effect on credit quality 

Seminar: Microsoft Excel applications for developing simple models to measure the market exposure of a shipping operator. 

Reading: M. Stopford, Maritime Economics, Routledge, 3rd edition 

Research from academic journals, newspaper articles and research from investment banks.