MBA and Sloan Elective Courses: Finance
FINANCE 221. Finance for Non-MBAs
This course is intended for graduate students and advanced undergraduate students who are interested in understanding the basic and most important ideas and techniques of modern finance. The course covers valuation and investment decisions, portfolio theory, financing decisions by firm, and options and derivative securities.
FINANCE 224. Finance-C
The focus of this course is the decision-making process of the corporate manager responsible for major financial decisions. Starting from theoretical foundations, we will analyze cases covering a wide range of topics such as capital structure, dividend policy, financial distress, private equity and venture capital, mergers/acquisitions, hostile takeovers and leveraged buyouts. These cases provide an opportunity to apply the newly acquired theoretical models and tools to real-life situations. Students are expected to develop their own spreadsheets and provide recommendations that serve to maximize shareholder value. An accelerated version of this course is offered as FINANCE 230.
FINANCE 225. Finance-M
Most financial transactions of firms are market-based transactions where the firm interacts with investors in financial markets. The aim of this course is to provide you with an understanding of the workings of financial markets. We will build on the basic concepts you learned in Managerial Finance to explore how investors and corporate managers make decisions about risk and return, how financial markets reach equilibrium, how imperfections create opportunities for innovative financial solutions, and how competition constantly changes the face of financial markets. We use cases to develop these topics in the context of concrete practical decision-problems, such as asset allocation of a large endowment fund, raising of outside capital, or the design of a risk management strategy using financial derivatives.
FINANCE 230. Finance—Accelerated
The main aim of this course is to enable students to apply the fundamental ideas of financial economics to the problems in the area of corporate finance with all the complexities the real world entails. The main focus of this course is on the corporate financial manager and how he/she reaches decisions as to capital investments, dividends and financing of all sorts. We will cover many issues that are important to a modern financial manager including such topics as leveraged buyouts, hostile takeovers, private equity financing and venture capital, and financial distress and bankruptcy. The cases will be used to motivate our discussion of how to bridge the gap between rigorous finance theory and its application to practical problems in corporate finance. The course is case-based and more advanced than another corporate finance course offered in the menu.
FINANCE 319. Private Equity Investing Seminar
This seminar focuses on private equity investing, including buyouts and venture capital. Private equity and venture capital are increasingly important activities. This seminar explores selected topics in private equity investing for those MBA students who take the co-requisite course FINANCE 321, Investment Management and Entrepreneurial Finance. Private equity includes both established and early stage companies. The course extends and deepens the entrepreneurial finance area for those with an interest in private equity, venture capital and principal investing, taking a global view. Utilization will be made of original case studies and lecture-discussions, building on the framework of FINANCE 321. The Seminar meets with outstanding investors.
FINANCE 320. Debt Markets
This course is intended for those who plan careers that may involve trading or investing in debt instruments and their derivatives, including money-market instruments, government bonds, repurchase agreements, interest-rate swaps, mortgage-backed securities (MBS), corporate bonds, and credit derivatives. We will emphasize trading, pricing, and hedging. Most lectures will start with a cold-called student presentation of an un-graded short homework calculation. There will also be a series of graded homework, and about five 30-minute graded `pop quizzes.' A small number of case studies will be used as vehicles to discuss the trading or risk management of debt portfolios.
FINANCE 321. Investment Management and Entrepreneurial Finance
Equity investment in companies, common stocks, early stage ventures, deals, partnerships, hedgefunds, or other entrepreneurial opportunities will be immediately or eventually important for most MBAs. This investment course discusses many practical and conceptual factors influencing the value of companies and deals, including publicly listed and private equity investments, and on success of investment approaches. The focus of this course is on quoted and private equity investments and on entrepreneurial finance. The format of the class is primarily case discussions led by the professor and principals who were involved in the case. This course enables MBA students to learn a broad investing skill-set and to study outstanding investors.
FINANCE 322. Financial Intermediaries and Capital Markets
This course focuses on financial markets, institutions, and instruments. We consider when and how firms raise capital through the life cycle, beginning with the capital-raising decisions and transactions for young firms and then discussing the decisions facing older, listed firms. We concentrate mainly on the firm?s perspective while also considering the perspective of financial intermediaries. Issues to be considered in this course include the role of financial intermediaries like commercial banks and investment banks, the decision to go public, the pricing and role of investment banks in IPOs, bank debt, public debt, private placements, commercial paper, and markets for junk bonds.
FINANCE 323. International Financial Management
With a daily volume of more than $1.8tr the foreign exchange market is by far the largest financial market in the world. It is also one of the most important ones as it is impossible to avoid exchange rate risk in the global economy. We will examine various aspects of the foreign exchange market. First, we will examine the role of governments and central banks. We will then focus on the markets for spot exchange, currency forwards, options, swaps, international bonds, and international equities. For each of these markets, the valuation of instruments traded in these markets and, through cases, the application of these instruments to managing exposure to exchange rates, financing in international capital markets, and international capital budgeting.
FINANCE 325. Topics in Corporate Finance
This course both extends and deepens the materials covered in FINANCE 224/230. Major topic areas include: capital structure, distribution policy, mergers and acquisitions, corporate restructuring, pricing of selected financial instruments, and financial contracting and security design under adverse selection and moral hazard. The course will be conducted on a "quasi seminar" basis, so enrollment is limited. Cases deal with applications, and approximately 50% of the sessions involve case discussions for at least part of the session. Full lecture, mini lectures on a variety of topics, and guest speakers fill out the menu. Prerequisite: The course is open to all second year MBA students and Sloan students who have taken FINANCE 229. All others should have experience and/or course work that covers, capital budgeting, cost of capital, capital structure, short-, intermediate- and long-term financing, including convertible securities, and financial analysis and forecasting (pro-forma and other forecasting devices). This course assumes such background and should be considered advanced. First year MBA students and non-GSB students need the instructor's permission.
FINANCE 326. Derivative Securities
This course is an introduction to options, futures and other derivative securities. The goal is to learn a core set of principles that underlie the pricing and use of derivatives. These principles are explored in a series of real-world examples that will help us to build intuition and familiarity with a broad spectrum of markets and risk-management applications. In particular, we will cover the valuation and use, both for risk management and for speculation, of forwards, futures, swaps, and options, including the Black-Scholes option-pricing formula; delta-hedging; Monte-Carlo valuation; credit derivatives; and financial risk management.
FINANCE 329. Investment Seminar
Investment Seminar: Global Principal Investing is a seminar on selected topics in masterful investing in publicly traded and private equity/venture capital investments, with focus on the principal's point of view. We study hedge funds and meet with outstanding investors. The scope is global. The Seminar is taught by a founding director of the largest international investment fund. The co-requisite is F321-Investment Management and Entrepreneurial Finance.
FINANCE 330. Investment Management: Asset Allocation and Asset/Manager Selection
This course covers strategic and tactical asset allocation in investment portfolios as well as specific asset and manager selection. We consider challenges that are unique to the various asset classes that comprise broad-based portfolios, including: public equities, fixed income securities, private equity (both buyout and venture capital), hedge funds, and real assets (real estate, energy, timber, and commodities). We also consider challenges that are specific to various geographies (domestic versus developed international versus emerging markets) across the various asset classes. The portfolio optimization framework employed considers the perspective of different types of investors that vary along such dimensions as risk preference, liquidity preference/investment horizon, tax status, social objectives, and special asset-specific relationship, information or skill advantages.
FINANCE 335. Corporate Valuation, Governance, and Behavior
This course will develop a detailed knowledge of corporate valuation techniques, together with an understanding of the role such valuations play in a wide range of corporate financing decisions. First, the course will carefully consider different valuation techniques, the assumptions that underlie each of these methods, how they are applied in practice, how they are related to one another, and how to decide which method of valuation is appropriate for a given application. After developing these tools, they will then be applied to a wide range of corporate finance settings. Among the applications to be considered are mergers and acquisitions, international valuation, corporate governance, financial distress, agency conflicts, asymmetric information, and overvaluation. For all of these applications, this course will emphasize the central importance of valuation to understanding observed phenomena and to guiding optimal decision making, as well as the unique challenges to valuation posed by the particular application.
FINANCE 341. Modeling for Investment Management
This course will take the perspective of the sophisticated investor or money manager who is responsible for applying financial models in order to meet investor objectives. The course will build on the theories presented in Managerial Finance, particularly those focused on investment and capital markets. Important issues in modern investment analysis will be analyzed, with an emphasis on designing and implementing computer models. Students will implement investment models using Excel. Topics will include portfolio optimization, portfolio performance measurement, derivative valuation, and Monte Carlo simulation. Students will also gain experience presenting financial models and critically assessing them.
FINANCE 342. Financial Markets and the Macro Economy
This course addresses the interaction between financial markets and the macro economy. First, we will focus on the role and targets of the Federal Reserve Bank (Fed), the conduct of monetary policy, and the determination of interest rates. We further provide an overview of the instruments of the money market and their valuation, such as federal funds, commercial paper and treasury bills. We then discuss the role of financial institutions, the importance of regulation and the regulator's response to financial crises. The last part of the course will address the interaction between stock markets and the macro economy, including the countercyclical behavior of expected stock returns and how macroeconomic variables relate to the cross-section of stock returns.
FINANCE 346. Institutional Money Management
This course will study the main components of the money management industry: mutual funds, hedge funds, private equity funds and venture capital funds. The emphasis of the course will not be on how managers who run these funds make money, but rather on how the industry is organized, how compensation is determined, and how economic rents are divided between managers and investors. The course will explore how competitive market forces interact with managerial skill and other market frictions to give rise to the observed organization of the industry.
FINANCE 350. Corporate Financial Modeling
The course will take the perspective of a mid-level manager or decision-maker who is responsible for collecting, analyzing, and utilizing financial information in the context of a major transaction. The class will integrate theories presented throughout courses in the core, particularly accounting and finance. In addition to providing an important context for application of these theories, the seminar will also incorporate various methodologies that will enhance a manager?s ability to develop and review financial models. Students will work on a series of cases and build models that can be used for earnings and pro-forma financial statement forecasts, valuation, the assessment of financing needs, merger analysis, and LBO evaluation. Students will also gain experience presenting financial models and critically assessing them. By the conclusion of the course, students will develop the skills to construct complex financial models and the logical frameworks to utilize them for various organizational applications.
FINANCE 595. Credit Risk
The credit crisis which began in mid-2007 brought to an end a period of around ten years of dramatic innovation and volume growth in many credit markets and in credit derivatives in particular. This period of growth also saw financial institutions of all types greatly increase their attention to credit sensitive instruments. It is too early to say when the crisis will end or how credit markets will be affected in the long run but it seems safe to say that many of the developments of the past ten or so years will still be with us. The objective of the course is to provide an introduction as well as an in-depth understanding of issues in credit risk, its modeling and analysis as well as credit related instruments such as default-prone debt and credit derivatives. The objective is to provide a balance between developing, on one hand, a sound conceptual framework and, on the other, market understanding and insight. Both are essential to the informed practitioner.