Investments
This course focuses primarily on equity investments. It begins by examining the foundations of portfolio theory: risk and risk aversion, wealth allocation, and optimally risky portfolios. Various asset-pricing theories are discussed. The concept of market efficiency is introduced and empirical evidence for and against market efficiency is presented. The course continues with an examination of the theory and practice of portfolio management. Portfolio performance is discussed.
International Finance
This course provides an integrated perspective on the subjects of foreign exchange, the international capital markets, and the new instruments and techniques of the world’s centers of global finance. It is intended for students requiring a good understanding of modern finance in a global context. The course is divided into the following major modules: (1) the international financial system, (2) foreign exchange, (3) forwards, futures, options, and swaps in international finance, (4) managing international financial risk, (5) the international capital market, (6) international investing, and (7) financing in the global capital market.
Valuation
This course studies advanced corporate valuation using discounted cash flow, comparables, and option techniques. Steady state valuation is followed by valuation when leverage is planned to rise then recede over time to a target level, as occurs in buyouts, takeovers, defensive repurchases, project finance, and other HLTs. Additional understanding of valuation in an international/cross-border setting is then pursued. Valuation in a project finance setting is also examined. Financing topics are interspersed, using equity, bank debt, complex debt, and hybrid securities.
Options, Futures and other Derivatives
This course explains what options are and how they are priced. The course begins by explaining the basics of options and arbitrage restrictions on their prices. Topics include pay-off diagrams, put-call parity, and simple trading strategies. Next, the idea of replicating portfolios is introduced and shown to be useful in pricing options. The binomial option-pricing model is developed. Subsequent topics include factors affecting the pricing of options, delta and gamma, risk-neutral pricing, and the Black-Scholes option pricing model for stocks that do and do not pay dividends. Corporate applications of option pricing are also discussed. |
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Corporate Financial Policy
The course focuses on the key policy decisions made in corporate finance. Topics include ways to finance a firm’s investment, optimal capital structure, cost of capital, factors affecting financing costs, how much, if any, of the firm’s earnings should be paid out to shareholders, stock dividends and splits, and the economics of raising external capital.
Fixed Income Analytics
This course examines the pricing and yield determinants of various fixed income securities including Treasury bills, notes and bonds, strips, corporate bonds, munis, mortgages, and asset-backed securities. Topics include the term structure of interest rates, duration, convexity, immunization, and the various types of risk that can affect the pricing of fixed income securities. Arbitrage-free pricing methods are explained. The course is designed to give students the quantitative tools they need to evaluate streams of fixed-income cash flows.
Leadership and Ethics for Financial Executives
This course concerns the ethical foundations of leadership in business and society. Students will gain an understanding of various academic perspectives on leadership, real-world examples of effective and ineffective leadership, and insights into their own leadership capabilities. The emphasis on ethics will include some moral philosophy, but will also involve the application of common sense morality to business leadership. This means that active student participation is essential in this course. The classroom experience will include much conversation, debate, disagreement, and dissent in response to provocative case studies, class exercises, and group projects.
Entrepreneurial Finance
Entrepreneurial firms, as well as other firms whose prospects are opaque to the public equity market, face financial issues that are significantly different than those facing established companies. This course focuses on analyzing the special financial issues faced by such companies and on developing the knowledge and tools needed by managers of such firms. Topics covered will include start-up financing (e.g. venture capital, leasing, and bank loans), financial management of rapidly growing firms, valuation, deal structuring, financial distress, the harvest decision, and exit strategies. The small company LBO is also discussed. In addition, the course examines the broader market for private equity. Using case studies and academic papers, the course investigates why firms seek private rather than public equity and identifies some differences between private and public equity investments. The recent up-trend of investment in emerging economies by private equity funds is examined. |
