Report on Global Financial Markets

Order Description

• Conduct comprehensive valuation on Friends Life prior to the acquisition announcement.
Your valuation should use relevant valuation technique(s) to arrive at an appropriately
discounted present value (per share) for Friends Life.
• Evaluate the impact on the share price of Friends Life and Aviva following the above
news announcement. Does the movement of share price reflect the insights from Efficient
Market Hypothesis (EMH)?
• You are required to demonstrate appropriate trading strategy that might be appropriate to
exploit price inefficiency prior to and during the acquisition process. This can be
performed by back-testing on the performance of such trading strategy.
• You are required to conduct in-depth background research to enhance the analysis of the acquisition event. Such research should demonstrate in-depth understanding on the
working of the sector and be able to predict the outcome of the event.

M010LON GLOBAL FINANCIAL MARKETS
COURSEWORK
The following news was announced on November 21 2014 and taken from Morningstar.
“The company (Friends Life) and Aviva PLC note the press speculation and confirm that
they have reached agreement on the key financial terms of a possible all share
combination of Aviva and the company (Friends Life). Under the terms of the Possible
Offer, Aviva would acquire the entire Ords* capital of the company (Friends Life) on the
basis of an exchange ratio of 0.74 Aviva Ords for each company Ords. The Possible
Offer represents an indicative value of approximately 399p per company share. Aviva is
required, by not later than 19 December 2014, to either announce a firm intention to
make an offer or announce that it does not intend to make an offer.”
Ords* means ‘ordinary’ class of share
A Morningstar report for Friends Life is included.
• Conduct comprehensive valuation on Friends Life prior to the acquisition announcement.
Your valuation should use relevant valuation technique(s) to arrive at an appropriately
discounted present value (per share) for Friends Life.
• Evaluate the impact on the share price of Friends Life and Aviva following the above
news announcement. Does the movement of share price reflect the insights from Efficient
Market Hypothesis (EMH)?
• You are required to demonstrate appropriate trading strategy that might be appropriate to
exploit price inefficiency prior to and during the acquisition process. This can be
performed by back-testing on the performance of such trading strategy.
• You are required to conduct in-depth background research to enhance the analysis of the
acquisition event. Such research should demonstrate in-depth understanding on the
working of the sector and be able to predict the outcome of the event.
The starting time for discussion is November 21 2014 and the cut-off time for discussion is
February 13 2015.
Present your finding in a report format according to the weight. The length should be no longer
than 2,500 words. You need to provide data and valuation result in Excel format as research
evidence in the appendix. References and appendixes will not be included in the final word count.
Learning Outcomes
• Demonstrate knowledge of the purpose and functions of global financial markets
• Analyze the role of financial market data in supporting business decisions
• Critically evaluate the impact of the global financial markets on the business environment
• Demonstrate the ability to analyze and present quantitative data to support an argument.
• Use information technology to analyze and communicate financial data
• Reflect on your own ability to interpret and act upon the changing business environment.
Late submission
Late submission will be marked at 0 but will allow a resit opportunity. No submission will be
recorded as ‘Absent’ and no resit opportunity will be offered. Extensions will be in accordance
with University policy.
Grades
You must check that all your coursework marks have been recorded accurately on Moodle and
notify your module leader if you believe a mistake has been made.
All grades are provisional until confirmed by the Subject Assessment Board. It is possible that
notified marks may be raised or lowered by this board.
Students are encouraged to keep copies (electronic) of all coursework submitted on this module.
Plagiarism
Students are advised to consult the University Regulations* and their course handbooks
regarding the penalties for and definition of plagiarism, which essentially is the deliberate and
substantial insertion in your own work of material from someone else e.g. a published source
such as a book or article, or simply another student’s piece of work, without acknowledging the
extent or source of the quotation.
*To view regulations use the University website.
Referral
Resubmission of assignment, by the Faculty summer re-sit deadline (posted on the module web
when date confirmed).

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