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Regular version of the site

Theory of Finance

2020/2021
Academic Year
ENG
Instruction in English
3
ECTS credits
Course type:
Elective course
When:
2 year, 3 module

Instructors


Maiti, Moinak

Course Syllabus

Abstract

This is an introductory course on theory of finance. The course starts with discussing the basics terms such as the cashflows, TMV, and it progresses towards the more advanced topics. It also discusses empirical puzzles and recent theories that have been developed. After mastering this course, the students will gain substantial knowledge on the theory of finance and will be able to apply the same in solving real life problems.
Learning Objectives

Learning Objectives

  • To know theories of finance and their appropriate applications
  • To critically analyze the given problem and to derive comprehensive solutions for the given problem
  • To identify a problem and select appropriate models to solve it
  • To develop new models and apply them to solve problems in finance
Expected Learning Outcomes

Expected Learning Outcomes

  • Knowledge of finance theories and its appropriate applications
  • Identifying problem and appropriate model selections
  • Will be able to critically analyze the given problem and to derive comprehensive solutions for the given problem
  • New model development and its applications to solve the problems in finance
Course Contents

Course Contents

  • Introduction, Cash Flow and Time value of Money
  • Discounting & NPV
  • Valuation: Stocks & bonds; Understanding Options
  • Random Walk theory & GBM
  • Introduction to Risk & Returns
  • Portfolio Theory & CAPM
  • Behavioral Finance & Neurofinance
  • Market Efficiency
Assessment Elements

Assessment Elements

  • non-blocking Class activity
  • non-blocking Project 1
    Project may be held in form of either PPT or an essay on a given topic/case
  • non-blocking Project 2
    Project may be held in form of either PPT or an essay on a given topic/case
  • non-blocking Final exam
    The exam is held in a written form at LMS platform. You should be online 5 minutes before the official start of the exam. The students must be online during the whole period of the exam (80 minutes). If a student faces with technical problems during the exam, she should notify the teacher immediately by email, attaching the screenshot affirming the state of the problem.
  • non-blocking Midterm exam
    The exam is held in a written form at LMS platform. You should be online 5 minutes before the official start of the exam. The students must be online during the whole period of the exam (80 minutes). If a student faces with technical problems during the exam, she should notify the teacher immediately by email, attaching the screenshot affirming the state of the problem.
Interim Assessment

Interim Assessment

  • Interim assessment (3 module)
    0.1 * Class activity + 0.5 * Final exam + 0.2 * Midterm exam + 0.1 * Project 1 + 0.1 * Project 2
Bibliography

Bibliography

Recommended Core Bibliography

  • Brealey, R. A., & Allen, F. (2015). Principles of corporate finance. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.BEEE7487
  • Brealey, R. A., & Myers, S. C. (2012). Principles of corporate finance. Slovenia, Europe: Irwin. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.BA880E76
  • FAMA, E. F. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. Journal of Finance (Wiley-Blackwell), 25(2), 383–417. https://doi.org/10.2307/2325486
  • Fama, E. F. (1991). Efficient Capital Markets: II. Journal of Finance, (5), 1575. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.bla.jfinan.v46y1991i5p1575.617

Recommended Additional Bibliography

  • MARKOWITZ, H. (1952). Portfolio Selection. Journal of Finance (Wiley-Blackwell), 7(1), 77–91. https://doi.org/10.2307/2975974
  • Markowitz, H. M. (1991). Foundations of Portfolio Theory. Journal of Finance (Wiley-Blackwell), 46(2), 469–477. https://doi.org/10.1111/j.1540-6261.1991.tb02669.x