AEM 2240 - Finance for Dyson Majors

Spring. 4 credits. Letter grades only (no audit).

Forbidden Overlap: due to an overlap in content, students will receive credit for only one course in the following group: AEM 2240, AEM 2241, HADM 2220, HADM 2250, NCC 5560.
Prerequisite: AEM 2100, AEM 2200, and AEM 2225 ; or equivalents. Enrollment limited to: Dyson undergraduates only.

B. Hwang.

Focuses on the mathematics of finance, valuation, and the economics of managerial decisions, corporate financial policy, risk management, and investments. Topics include the time value of money, bond and stock valuation, capital-budgeting decisions, financing alternatives, the cost of capital and the capital-structure decision, distribution policy, mergers and acquisitions and restructuring, options, forward and futures contracts, market efficiency and market anomalies, strategies of successful investors, and personal finance.

Outcome 1: Become familiar with the “Time Value of Money” and comfortable using that concept and formulas to solve problems in the areas of corporate finance, investments, and personal finance.

Outcome 2: Become familiar with stock and bond markets and learn the economics and mathematics behind the valuation of bonds, stocks, and firms.

Outcome 3: Become familiar with modern portfolio theory including the relationship between risk and return, the concept of diversification, the capital asset pricing model, and the arbitrage pricing theory.

Outcome 4: Become familiar with corporate financial decisions such as whether to accept or reject a project (“Capital Budgeting”), how to finance operations (“Capital Structure”), if and how to make payouts to investors (“Distribution Policy”), and how to analyze potential acquisitions (“Mergers & Acquisitions”).

Outcome 5: Become familiar with using derivatives as investment and risk management tools. Derivatives covered include options, convertibles, forward and futures contracts, and swaps.

Outcome 6: Become familiar with the concept of market efficiency and the data in support of the theory. Also become aware of tests suggesting the existence of market anomalies which run counter to the notion of market efficiency.

Outcome 7: Become aware of some basic investment concepts and strategies.

Outcome 8: Become aware of some basic personal financial decisions including the use of tax-advantaged retirement accounts such 401(k)’s and IRA’s, asset allocation, saving for educational expenses, insurance decisions, and ways to pass assets on to one’s heirs.

Outcome 9: Become aware of current financial and economic events.