FTMBA 2022_II Managerial Finance

This course covers the foundations of financial decision making by relying on a set of simple but powerful ideas. The core idea is the principal of the absence of arbitrage opportunities, or Law of One Price. We rely on this principal and the concept of net present value as the basis of the lectures’ unifying framework. Given the introductory and applied nature of the material, the teaching style combines classical lectures with discussions based on case studies. The instructor expects the participants to read the cases and think about the central problem analyzed in the case prior coming to class. We will discuss the course material together with the questions pertaining to the cases.

• Financial Markets, Financial Institutions, and their Functions
• The Corporation and its Governance
• Mechanics of Discounting / Investment Decision Rules / Capital Budgeting
• Capital Markets and the Pricing of Risk
• Optimal Portfolio Choice and the Capital Asset Pricing Model
• Financial Options (Overview)
• Investor Behavior and Capital Market Efficiency (Overview)

Introduction to financial markets, institutions, and actors; investment decision rules (NPV, Internal rate of return, payback, and others);ability to design a capital budgeting process; portfolio theory; understand the design, pricing and uses of contingent claims (options and futures), behavioral finance

Textbook: Brealey, Richard A., Stewart C. Myers, and Franklin Allen: Principles of Corporate Finance - Global Edition, McGraw Hill. [latest edition]. (hereafter BMA) Cases:Case #1 Warren Buffett – 2005Case #2 Investment Analysis and Lockheed Tri Star (HBS 9-291-031)Case #3: Beta Management Co. (HBS 292122)Case #4: Keller Fund's Option Investment StrategiesCourse Pack: The required course packet contains all the material for the class, except the for the textbook, which will be available separately.

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50% Written Final Exam, 15% Online Quizzes, 35% Case Study

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