BU283 outline F2020 v7 PDF

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Download BU283 outline F2020 v7 PDF

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Contents 1

Instructor Contact Info............................................................................................................. 2

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Prerequisites............................................................................................................................. 2

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Textbook .................................................................................................................................. 2 Course Description .................................................................................................................. 3

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Grading Scheme ...................................................................................................................... 3

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Self-Test, Practice Problems & Homework ............................................................................ 4

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Quiz Problems ......................................................................................................................... 5

9 POP Quizzes ............................................................................................................................ 5 10 Exams................................................................................................................................... 6 11

Self-Test, Practice Problem and Quiz Schedule .................................................................. 7

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Online Class Format ............................................................................................................ 8

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Weekly Schedule of Topics and Readings........................................................................... 9

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Learning Objectives ........................................................................................................... 10

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Announcements and Downloads........................................................................................ 10

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Academic Support.............................................................................................................. 10

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Email Policy ....................................................................................................................... 11

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Technical Support .............................................................................................................. 11

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Calculators and Computers ................................................................................................ 11

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How to Learn Finance........................................................................................................ 13

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Test Mark Calculation........................................................................................................ 15

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Online Textbook Access .................................................................................................... 17

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Recommended Reading for Finance Enthusiasts ............................................................... 20

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University and Course Policies .......................................................................................... 21

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Instructor Contact Info

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Instructors:

W. J. McNally, Bruce Everitt, Hira Amjad, Pan Jiang

E-Mail:

[email protected], [email protected], [email protected], [email protected]

Prerequisites

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Prerequisites: BU127, EC120 and EC140. Co-requisites One of the following courses: EC205, EC255, or EC285.

Notes: It is recommended that students wishing to take senior Finance electives take EC250/EC290 and EC260/EC270 prior.

Textbook

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Required 

William McNally and Stanley Eakins. Revel for Corporate Finance Online – 2/E (Ontario: Pearson Canada, ©2019). o ISBN-10: 0134422163, ISBN-13: 9780134422169. o CFO access instructions are provided at the end of this document. This course participates in the Digital Textbook Access program, so you will be charged through your student account.

Recommended 

William McNally. Workbook for Corporate Finance Online, 2/E (Ontario: Pearson Canada, ©2019). o ISBN-10: 0134836383, ISBN-13: 9780134836386. o Students who have a weaker quantitative background will find the workbook a useful supplement to the e-text. o The Workbook can be purchased through REVEL as a “print upgrade”. It will be shipped directly.

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Course Description

This course has three main topic areas: 1) valuation, 2) risk, and 3) financial analysis. The valuation part of the course covers time value of money mathematics and securities (bond and stock) valuation. The risk component defines risk, presents portfolio theory and introduces futures and options (which both can be used for risk management). The financial analysis section of the course covers ratio analysis, financial statements forecasting, and provides an introduction to short-term financial management.

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Grading Scheme Course Grading Scheme

Self-Test Questions Quiz Problems (8x) Pop Quizzes (7x) Midterms (2x) Final Exam

4% 12% 7% 40% 37%

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Self-Test, Practice Problems & Homework

To master finance, students must solve a large number of problems. The bulk of your learning will occur in the process of answering problems. A study of student performance in introductory finance found that a student’s grade improves with the number of problems attempted and with the effort invested in solving the problems.1 Try to do as many of the CFO problems as possible. (Do them all if you can.) CFO on REVEL has four types of problems: 1. 2. 3. 4.

Self-Test Questions Practice Problems Homework Problems Quiz Problems

1. Self-test Questions are graded and are embedded in the e-text. You should attempt each question as you encounter it during your reading. It will greatly help your comprehension and retention. Each Self-test question has a due-date associated with it (typically on the Sunday prior to the week in which the reading is covered). The self-test questions are graded and contribute to your course grade. You can complete the Self-Tests after the due date but you will not receive any marks for doing so. 2. Practice Problems are NOT graded. They are like end-of-chapter problems in a printed textbook. Each Practice Problem has a due-date associated with it (typically the Friday of the week in which the reading is covered). See the week-by-week schedule. You can complete the Practice Problems after the due date without penalty (since there are no grades for them). The due-dates will help you stay on schedule. 3. Homework Problems are NOT graded. They are supplementary practice problems. They have a due date at the end of the semester. Homework questions are not graded and are provided for students who want extra practice.

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W. McNally and B. Smith. 2010. “Determinants of Performance in a Hybrid Finance Course.” Advances in Financial Education. Vol. 8, Issues 1&2, pp. 22-34.

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Quiz Problems

Quiz problems are graded. There will be one Quiz per week. Quizzes will open on Sunday morning and closing at 11:59pm on Thursday. The Quiz questions have a number of VERY strict settings, so be careful. The number of attempts is set at one. You cannot repeat the questions. You cannot skip or go back. You must answer the questions sequentially as posed. In each question there is a ‘save for later’ button. It does NOT work. Don't trust it or use it. If you open a question, look at it, don’t answer it and then move on then you will get a zero. If you open the question, and then go off and do something else and the system times out, then you will get a zero. Last semester, a student had a question open and his browser froze with an unresponsive page error. When he refreshed the page he had received a zero for the question. To address the potential harm of browser errors, we will construct all quiz scores with a denominator of n-1. In addition, we will throw out the two lowest quiz scores. Other than that, no accommodations will be provided so do NOT petition your instructor for additional relief. To minimize the risk of a problem, students must be ready to complete the quiz when they start. Answer each question sequentially and promptly. You can't save answers and you can't move around the quiz. You can look at the e-text but don't leave a question too long or it may time out. All of the homework and quizzes are completed on REVEL. The fill-in-the-blank questions on REVEL are VERY sensitive as to the format and accuracy of your answers. Please read the instructions for each question, because they tell you how to format your answer. Please be careful with rounding. If your answer is wrong due to the fact that it is not formatted as the question requests, then you will not get a mark for that answer. Do not include any symbols in your answers (i.e., $ or %). Be careful when cutting and pasting values from Excel into REVEL as symbols (e.g., ‘$’) are sometimes included. If you include a symbol you will not get a mark.

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POP Quizzes

Pop-quizzes are short (6-10 questions and 5-10 minutes) multiple choice quizzes that test understanding of terminology, basic concepts and simple calculations. Pop-quizzes are designed to motivate students to read the e-text prior to the first class of each week. Students should prepare for the pop quizzes by reading the assigned sections of CFO. Pop quizzes will be served through the MyLS course.

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Exams

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Name Midterm Exam #1 Midterm Exam #2 Final Exam

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Date Saturday, Oct 10 Saturday, Nov 14 TBA

Start Time 7-8:20pm 6-7:20pm TBA

Absences o Students who miss the midterm and who submit a valid medical note (dated the day of the midterm and submitted promptly) will have the weight shifted to the final exam. Note that the final is cumulative. o The only other valid excuse for an absence is a death in the immediate family (i.e., parents, spouses, siblings and children). o There are no deferred midterm exams. Format o Exams will be closed book.. o The exams will be online served through MyLearningSpace with the Respondus Lockdown browser and webcam. o Scrambled question order, variant pool for each question, and students will not be able to move backwards in the exam.  Note: This exam format is due to WLU/LSBE rules and policies. Students unhappy with it should direct their complaints to the LSBE and WLU administration. o The exams will have relatively tight time budgets to discourage cheating. o All exams will be adjusted to a common mean.

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Self-Test, Practice Problem and Quiz Schedule

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DUE SEP 13 SEP 18 SEP 20 SEP 21-23 SEP 24 SEP 25 SEP 27 SEP 28-30 OCT 1 OCT 2 OCT 4 OCT 10 OCT 18 OCT 19-21 OCT 22 OCT 23 OCT 25 OCT 26-28 OCT 29 OCT 30 NOV 1 NOV 2-4 NOV 5 NOV 6 NOV 8 NOV 14 NOV 13 NOV 15 NOV 19 NOV 20 NOV 22 NOV 23-25 NOV 26 NOV 27 NOV 29 NOV 30-DEC 2 DEC 3 DEC 4 DEC 6 DEC 10

TYPE Self-Test Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Midterm #1 Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Midterm #2 Practice Problems Self-Test Quiz Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Start of Class Pop-Quiz Quiz Practice Problems Self-Test Practice Problems

CONTENT Ch.1, Ch.3 Ch. 1 (All), Ch.3 (All) Ch. 4.1-4.3 Annuity formulas Ch. 3 & 4 (4.1-4.3) Ch.4 (4.1-4.3) Ch. 4.4 & 4.5, Ch. 7.1-7.3 & 7.7 Ch. 4.4 & 4.5, Ch. 7.1-7.3 & 7.7 Ch.4 (4.4 & 4.5), Ch.7 (7.1-7.3 & 7.7) Ch.4 (4.4 & 4.5) Ch.7.4-7.5 Ch.7.6 & Ch.8.1-8.2 Ch.7.6 & Ch.8.1-8.2 Ch.7(7.5-7.6) & Ch.8 (8.1-8.2) Ch.7 (7.1-7.7) & Ch.8 (8.1-8.2) Ch.8.3-8.5 Ch.8.3-8.5 Ch.8 (8.3-8.5) Ch.8 (8.3-8.5) Ch.5, Ch.6 (6.1) Ch.5, Ch.6 (6.1) Ch.5 (All) & Ch. 6 (6.1) Ch.5, Ch.6 (6.1) Ch.6.2-6.3 Ch.6 (6.2-6.3) Ch.6 (6.4-6.5) & Ch.8.6 Ch.6 (6.4-6.5) & Ch.8.6 Ch.6 (6.4-6.5) & Ch.8.6 Ch.18 (18.1-18.5) Ch.18 (18.1-18.5) Ch.18 (18.1-18.5) Ch.18 (18.1-8.5) Ch.18.6, Ch.2 (2.3 & 2.5) Ch.18.6, Ch.2 (2.3 & 2.5) Ch.18.6, Ch.2.3 & 2.5 Ch.18.6 Ch.15.1 Ch.2, (2.3 & 2.5), Ch.15.1

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Online Class Format

Education is a combination of information transfer and the assimilation of that information. Information transfer will occur while students read (and watch) the online textbook. Assimilation is the process whereby the student makes sense of the information. It is the stage where students build mental models of the ideas so that they can be applied in other contexts. The online class time will be devoted to the assimilation stage through problem solving. Problems will be delivered using the Learning Catalytics (LC) software. With the LC app (or web site) students will see questions and be asked to input answers. After each question, students will see the solution and how the class performed. After class, LC questions can be reviewed. There are no marks for online class participation, but we highly recommend that students prepare, attend and actively participate in class. LC can be accessed from a smartphone or computer. LC is bundled free with the REVEL subscription. Instructions for accessing LC are provided at the end of this document with the online textbook access instructions. The URL for Learning Catalytics is: https://learningcatalytics.com

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Weekly Schedule of Topics and Readings Week Sep 10 Sep 14-18 Sep 14-18 Sep 21-25 Sep 21-25 Sep 28 – Oct 2 Sep 28 – Oct 2 Oct 5-9 Oct 5-9 Oct 12-16 Oct 19-23 Oct 19-23 Oct 26-30 Oct 26-30 Nov 2-6 Nov 2-6 Nov 9-13 Nov 9-13

Class No Class/Session Intro to Finance, Capital Markets & TVM TVM 1: PV, FV, ‘i’ and n TVM 2: Annuities TVM 3: Advanced Annuities TVM 4: Loans Bonds 1: Zeros Bonds 2: Coupons Midterm #1 Q&A Reading Week Bonds 3: Bond Prices Stocks 1: Equity & Preferred Shares Stocks 2: DDM Stocks 3: Repos, TPM & P/E Risk and Return Portfolio 1: Diversification Portfolio 2: Systematic Risk Midterm #2 Q&A

Readings

17 Nov 16-20 18 Nov 16-20

Portfolio 3: Equilibrium Portfolio 4: EMH & Fund Performance

Ch. 6.4 & 6.5 Ch. 8.6

19 20 21 22 23

Futures 1 Futures 2 & Options 1 Options 2 Ratio Analysis Ratio Analysis & WC Ratios

Ch. 18.1 & 18.2 Ch. 18.3 Ch. 18.4-18.6 Ch. 2.3 & 2.5 Ch. 15.1

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Nov 23-27 Nov 23-27 Nov 30-Dec 4 Nov 30-Dec 4 Dec 7-9

Ch. 1 & 3 Ch. 3 Ch. 4.1 & 4.2 Ch. 4.3 Ch. 4.4 & 4.5 Ch. 7.1-7.3 & 7.7 Ch. 7.4 & 7.5

Ch. 7.6 Ch. 8.1 & 8.2 Ch. 8.3 Ch. 8.4 & 8.5 Ch. 5 Ch. 6.1 & 6.2 Ch. 6.3

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Learning Objectives

Each week of the course is associated with a detailed list of learning objectives. The learning objectives are on MyLearningSpace in the “Learning Objectives” folder.

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Announcements and Downloads

Announcements Course announcements will be posted under ‘News’ on the BU283 MyLearningSpace site. It is your responsibility to check the announcements every few days. Document Downloads Supplementary readings, old exams, power point slides and exam information can be downloaded from the “Content” area on the MyLearningSpace site.

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Academic Support

Email: A team of TAs will provide online support via email. The TAs will answer emails seven days per week. If you are dissatisfied with an answer from that TAs, then you can send an email directly to your Instructor. (See section 17.) How to Ask a Question A question needs three parts and won’t be answered unless you include all three. First, the original text of the question you are working on. Second, your description of what you don’t understand (or think is incorrect). Finally, your work. In order to understand an explanation you need to have attempted an answer yourself. Don’t just ask to have the answer explained. If you ask that, then you will be referred back to the textbook. Your work must show the equations that you are using to solve the problem, a description of your solution approach (if necessary) and the values that you are plugging into the equation(s). If you are working in Excel, then your answer spreadsheet should also be included. Please label the variables and steps in your spreadsheet. If it is appropriate for solving the problem, then also attach a time line. You can take a picture with your smartphone.

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Email Policy

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The ability to email your instructor is a privilege and not an entitlement. Keep in mind that your instructor has hundreds of students and other non-course obligations. Respect their inbox—don’t clutter it with unnecessary emails. Follow these guidelines: 1) be polite and professional; and 2) don’t ask lazy questions that are answered elsewhere. Good Email Topics (Not Lazy): 1. 2. 3. 4. 5. 6.

A question about a financial concept, finance problem or event in the financial world. A possible error in the homework or in an exam. A personal issue (i.e., illness, injury or death in the family). Career advice. Elective course selection. Letters of reference requests.

Bad (LAZY) email topics: 1. Asking about issues that are addressed on the announcement board or in the course outline. 2. Asking for an extension on a Quiz deadline; 3. Asking for your mark before it is posted publicly; 4. Asking for a change in the course marking scheme (i.e., more weight on the final); 5. Asking for the opportunity to complete an extra assignment; 6. Asking for extra marks. We NEVER give extra marks, extra assignments or change the course weights for individual students. That would be unfair to the other students who need extra marks (assignments or a change in weighting) and it would be unfair to those who worked hard, achieved the grades they needed and are not asking for favours. Asking for these things is asking your instructor to compromise their integrity and the integrity of the course. Students who ask lazy questions will receive unhelpful (potentially sarcastic) replies. Often, the reply will direct students to this policy.

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Technical Support

CFO technical support is available at: https://support.pearson.com/getsupport/s/

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Calculators and Computers

Students must have access to a PC or Apple computer. The best tool for doing finance computations is a spreadsheet. A spreadsheet significantly increases the speed and accuracy of your computations. Students who are interested in completing the CFA designation should also

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strive to become proficient with a financial calculator, as it is the only computational tool permitted on the CFA exams. Students should consider purchasing an external monitor for their laptop. CFO is much easier to use with two monitors. With two monitors, the e-text and a spreadsheet can be open and visible simultaneously.

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How to Learn Finance

According to Professor Eric Mazur, education is a combination of information transfer a...