Finance
Professors: Sanjiv R. Das, Hoje Jo, Atulya Sarin, Hersh M. Shefrin, Meir Statman
Associate Professors: Ye Cai, George Chacko, Robert J. Hendershott, Seoyoung Kim (Chair), Carrie Pan, Gustavo Schwenkler
Assistant Professors: Elyas Fermand, Samuel Lee
Glen Klimek Professor: Meir Statman
Mario L. Belotti Professor: Hersh M. Shefrin
William and Janice Terry Professor: Sanjiv R. Das
Gerald and Bonita Wilkinson Professor: Hoje Jo
Lecturer: Michael Dana, Wendy Ku
Adjunct Lecturer: Joseph Ori, Ning Pu, Manish Tewari
Professors of Practice: Donald Davis
Finance Curriculum
FNCE 2400. Financial Forecasting and Analysis
Introduces the basic concepts and tools of finance. Reviews balance sheet and income statement categories. Emphasizes the time value of money, present value calculations, the opportunity cost of capital, valuation of simple securities, and evaluating investment opportunities in a capital budgeting system. Prerequisite: Basic understanding of accounting principles and a declared MS in Finance & Analytics student. (4 units)
FNCE 2404. Introduction to Time Series Forecasting
This course is designed to provide a comprehensive introduction to forecasting methods used in time series analysis and presents enough information about each method so you will be able to use them sensibly. A wide range of topics are going to be covered, including basic concepts of time series, trends and seasonality, smoothing models, ARIMA models, as well as other advanced forecasting methods. Throughout the course, theoretical frameworks will be integrated with empirical analysis including multiple time series examples and cases. Prerequisites: FNCE 2409. (2 units)
FNCE 2409. Econometrics
This course introduces a broad set of econometric tools to analyze large-scale real-world company data to make data-driven business decisions. Topics include the Ordinary Least Squares (OLS), model selection, Generalized Least Squares (GLS), instrumental-variables regression, quantile regression, count data models, binary outcome models, and selection models. (2 units)
FNCE 3000. Financial Management
This course provides an introduction to finance. It addresses the theory and practice of financial management, the generation and allocation of financial resources. The main objective is to provide a foundation in the basic concepts of finance, including the time value of money, cash and working capital management, the role of financial markets, portfolio theory, asset pricing, and the risk-return tradeoff, and to expand awareness of institutions and practices in business and finance. Prerequisites: ACTG 3000 (co-requisite). (4 units)
FNCE 3453. Corporate Finance
Deals with the basic and advanced concepts of corporate finance, particularly the role of the financial manager and the goal of financial management. For this purpose, the course focuses on agency conflicts and corporate governance, capital structure, payout policy, financial distress, options (real and executive), derivatives/hedging, and international issues. Prerequisite: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2457/3457. International Financial Management
Studies financial issues specific to firms operating internationally. Examines the global financial environment, agency problems and corporate governance, international financial markets, exchange rate behavior, and corporate hedging decisions using currency options, currency futures, forward & cross-currency interest rate swaps by the multinational corporation (MNC) and understanding international parity relations. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2460/3460. Mergers, Acquisitions, and Corporate Restructuring
Examines corporate governance and corporate restructurings. Emphasizes how corporate ownership, control, and organizational structures affect firm value. Other topics include valuing merger candidates, agency theory, and takeover regulation. Places a heavy emphasis on case projects and/or class presentations. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2464/ 3464. Real Estate Finance
Focuses on the risks, practices, and problems particular to financing and investing in real property. Teaches the concepts and techniques necessary to analyze financial decisions embedded in property development and investment. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2480/3480. Emerging Company Finance I
Covers financial topics most relevant to newly formed companies, with an emphasis on Silicon Valley-style startups that target large markets and raise outside capital. Includes topics on: (1) valuation, which is the course's primary theme, underlying all of the topics covered, (2) evaluating business opportunities, which focuses on the underlying economic principles that differentiate large opportunities from small opportunities, (3) funding business opportunities, which covers both identifying a company's needs and acquiring the capital to finance those needs, and (4) discussing how successful entrepreneurial ventures "exit". Prerequisites: FNCE 2400 or FNCE 3000. (2 units)
FNCE 2481/3481. Emerging Company Finance II
This course extends the study of financial strategy and operations beyond the start-up stage and as a company approaches life as a publicly-traded entity. Students will examine a company's IPO readiness, its positioning against others in the public domain, the role finance execs play in helping investors assign value to high-growth and "first of a kind" companies. The course will use case study discussions to illustrate various value-creation paths for companies, including financial and business model changes while publicly traded as well as considerations and circumstances around the sale of a company. Other topics covered include the social responsibilities of tech companies and their broader impact on their communities, including how cognitive diversity can lead to better outcomes for many constituents. Prerequisite: FNCE 3480. (2 units)
FNCE 2482/3482. Business Valuation
Discusses implementing finance theory for valuation problems. Provides practical valuation tools for valuing a company and its securities. Covers valuation techniques including discounted cash-flow analysis, estimated cost of capital, market multiples, free-cash flow, and pro forma models. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2484/3484. Financial Engineering
Examines the design, valuation, and risk management of derivative securities (futures, options, etc.), including structured products. Includes topics on arbitrage theory, futures, equity options, bond options, credit derivatives, swaps, and currency derivatives. Mathematical modeling of derivatives, including implementation and applications in investments, corporate finance, and risk management. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2486/3486. Behavioral Corporate Finance and Risk Management
Identifies key psychological phenomena that impact financial judgments and decisions made by corporate managers. Assess potential corporate nudges for addressing psychological phenomena which obstruct sound practices for managing risk and maximizing value. Course focus is on developing tools and concepts to recognize and mitigate pitfalls that prevent traditional principles of corporate finance from being put to their best use in respect to valuation tasks, capital budgeting, capital structure, mergers and acquisitions, payout policy, and corporate governance. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 2489/2589/3489. Mathematical Finance
This course will comprise an immersion into the mathematics and models of modern finance, with an emphasis on conceptual and mathematical understanding, as well as building and implementing models. It will be technology dependent since computers are essential to solving problems in this field. Prerequisites: MSIS 2402 or MSIS 2502 or FNCE 3000. (4 units)
FNCE 2405/3491. Investments
Investment knowledge is important to investment professionals, such as portfolio managers and financial advisers. They must know how to evaluate and select stocks, bonds, options, and other securities, and how to guide investors to fitting portfolios and good investment behavior. Investment knowledge is also important to all of us as individual investors. This course is centered on evidence-based knowledge of investments and investment behavior. It presents side by side standard and behavioral investment theory, evidence, and practice. These include analysis of wants and cognitive and emotional shortcuts and errors, portfolios, life-cycles of saving and spending, asset pricing, and market efficiency. These also include analysis of financial markets, such as stock exchanges, and securities such as stocks, bonds, options, and futures. Prerequisites: FNCE 2400 or FNCE 3000. (4 units)
FNCE 3492. Environmental, Social, and Governance (ESG) Investing
ESG is shorthand for environmental, social and governance investment criteria. Earlier and concurrent names include Socially Responsible Investing (SRI), Sustainable investing, Impact investing, Ethical Investing, Faith-Based Investing, Values-based Investing (VBI), and Green Investing. We will explore the following questions - What is ESG? What do ESG investors want? What do ESG investors get? What is the practice of ESG? What is the link between ESG and Corporate Social Responsibility (CSR)? Prerequisites: FNCE 2400 or FNCE 3000. (2 units)
FNCE 3728. Alternative Investments 1 | Partnerships and Venture Capital
This is the first in a series of two courses that cover alternative investments. Alternative investments contrast to widely-held investments like stocks, bonds, and mutual funds. This course covers how these investments are generally structured along with a closer study of a particular category, venture capital. Prerequisite: FNCE 2400 or FNCE 3000. (2 units)
FNCE 3729. Applied Portfolio Management I
This course introduces the practical aspects of investment management. This is part one of a two-course sequence. The two proposed courses will provide students a framework to gain a detailed understanding of dynamics and factors affecting today's investment managers. Prerequisite: FNCE 2405 or FNCE 3491. (2 units)
FNCE 3730. Applied Portfolio Management II
This course builds on the material covered in Applied Portfolio Management I and focuses on the practical aspects of portfolio performance evaluation and risk management. Prerequisite: FNCE 3729. (2 units)
FNCE 3731. Intro to Fixed Income
This course provides an introduction to fixed income. It covers the valuation and application of basic fixed-income securities and an introduction to select credit derivatives. The main objective is to provide a foundation in the basic concepts and mathematics of these securities and their applications, holistically as it pertains to a means to (i) immunize investment portfolios; (ii) raise capital, and (iii) hedge attendant risks. Prerequisite: FNCE 2400 or FNCE 3000. (2 units)
FNCE 2459/3459. Financial Markets and Institutions
Analyzes the main functions of financial institutions such as commercial banks, investment banks, and insurance companies from the perspective of a corporate issuer, and reviews the recent developments in the financial service industry. Topics covered include payment processing systems, extension of credit to businesses and consumers, money management, investment banking and securities trading, and latest developments in the industry brought by new players using digital technologies and big data. Potential market size, product pricing, and profitability of the new players will be evaluated. Prerequisite: FNCE 2400 or FNCE 3000. (2 units)
FNCE 2408/3806. Analytics in Finance
This course covers key issues in panel data analysis, with an emphasis on their applications in empirical finance, especially empirical corporate finance. The course aims to introduce various econometric methods for analyzing panel data and develop core techniques to identify causal relations in the data. We will begin with the standard linear regressions, and extend to pooled, fixed effect, and random effect regression models, instrumental variables, differences-in-differences, and regression discontinuity. Students will be exposed to a broad range of applications in finance through reading academic papers and conducting their own empirical analysis. Prerequisite: FNCE 3000, MSIS 2402, and FNCE 2409 (2 units)
FNCE 3807. Intro to FinTech
This two-unit course provides an introduction to FinTech. It covers the evolution of "traditional" finance methods -- namely, the disruptions and innovations that have transformed: (i) how we access capital; (ii) how we allocate or invest capital; (iii) how we settle or transfer capital; and (iv) how we monitor and maintain the integrity of financial institutions and transactions. The main objective is to provide a foundation in the basic concepts and mathematics of these innovations and their applications. Prerequisite: Basic understanding of financial markets and mechanisms. (2 units)