Finance Program

1. Goal 1 – Corporate Finance
   Students will be effective at corporate financial management.
   
   Students will be able to:

   • Objective 1- Use capital budgeting techniques to value a firm or project, including forecasting cash flows; estimating horizon value if necessary; selecting an appropriate discount rate; and computing value using NPV, IRR, and profitability index. Students should also be able to conduct risk analysis on capital budgeting projects, such as sensitivity analysis, scenario analysis, and real options;
   • Objective 2 - Evaluate capital structure for a firm or project, calculate a firm’s weighted average cost of capital, and value the value of a leveraged project (or the change in value of a leveraged firm) using WACC and other leveraged firm valuation methods;
   • Objective 3 - Evaluate how firms manage their working capital to increase value;
   • Objective 4 - Develop a risk management plan for a firm or project;
   • Objective 5 - Describe how corporate financial management decisions affect firm performance.
2. Goal 2 – Markets and Portfolio Theory
   Students will understand basic portfolio theory, implications of the efficient market hypothesis and behavioral finance.
   
   Students will be able to:

   • Objective 1 - Demonstrate an understanding of the stock, bond, option, and futures markets and how they function;
   • Objective 2 - Describe the capital asset pricing model (CAPM), including its assumptions, and the security market line (SML);
   • Objective 3 - Explain minimum-variance portfolios, the efficient frontier, and capital market line (CML);
   • Objective 4 - Describe market efficiency and the potential relevance of behavioral finance in understanding market anomalies;
   • Objective 5 - Explain the benefits of diversification, how correlation effects the benefits of diversification, and the implications of diversification on portfolio construction;
   • Objective 6 - Calculate the return and risk measures of an individual security and a portfolio.
3. Goal 3 – Financial Institutions
   Students will be knowledgeable of operation, risk measurement and management, and regulation in financial institutions.
   
   Students will be able to:

   • Objective 1- Demonstrate understanding of the function of different financial institutions in providing financial services, industry composition and trend, operating activities and performance, and the nature of government regulation imposed on the industry;
   • Objective 2 - Apply risk-evaluating approaches to measure the risk exposures of financial institutions in interest rate, credit, liquidity, market, foreign exchange, off-balance-sheet activities, and other operations;
   • Objective 3 - Demonstrate knowledge of capital requirements set by U.S. regulators to protect financial institutions from insolvency and failure, and different risk- and category-based capital adequacy measures used by financial institutions and regulators.
   • Objective 4 - Describe how financial institutions use derivative contracts, loan sales, and asset securitization to hedge liquidity, interest rate, and credit risks originated from their asset portfolio.
4. Goal 4 – Valuation
   Students will be knowledgeable of the valuation of certain asset classes
   
   Students will be able to:

   • Objective 1- Perform valuation calculations using time value of money techniques such as NPV and IRR and valuation formulas such as the dividend growth model, the capital asset pricing model and other appropriate valuation formulas;
   • Objective 2 - Value equities using different models and the assumptions behind them;
   • Objective 3 - Value different types of bonds and understand the nature of the yield curve and how the pure expectations hypothesis explains the yield curve;
   • Objective 4 - Demonstrate an understanding of options terminology, the factors affecting option prices, and be able to create basic strategies involving options.
5. Goal 5 – Financial Statement Analysis
   Students will be knowledgeable of financial statement analysis and understand how financial statements can be used to evaluate and value a business.
   
   Students will be able to:

   • Objective 1- Construct a balance sheet, income statement, and cash flow statement using basic accounting transactions and link each of primary financial statements together;
   • Objective 2 - Calculate and interpret financial ratios to manage desired financial outcomes and identify and diagnose company problems, challenges, and opportunities;
   • Objective 3 - Forecast the future pro forma financial statements and performance of a company;
   • Objective 4 - Compare the financial statements of peers and comparable companies to identify the strengths and weaknesses of a company and create a top-down view of the industry and sector in which a company operates;
   • Objective 5 - Value an enterprise using a company’s historic and pro forma financial statements.

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Economics 

1. Goal 1
   Students should aquire a deep understanding of how markest and economies operate.
2. Goal 2 
   Students should aquire sufficient mathematical and statistical skills to be able to analyze economic problems and to make use of those skills in their future careers.
3. Goal 3
   Students should learn to communicate economic content and arguments effectively in written and spoken form, skills that are also useful in other careers.
4. Goal 4
   Students should be able to apply their knowledge of economics to problems of public policy and to thereby become more effective and informed citizens.