Finance Courses

FIN 201 Introduction to Finance (3 credits)
An overview of managerial finance: nature and scope; fields of finance, objective of the firm----profit maximisation vs. wealth maximisation; goals of financial management; functions of a financial manager. Financial statements and their analysis: the balance sheet, income statement, statement of retained earnings and the statement of cash flows; analysis of liquidity, profitability, debt performance and market value through financial ratios; time series vs. cross sectional analysis. Time value of money: present value and future value concepts; calculating present and future values of cash flow streams----uneven cash flows and annuity; factorial time period considerations; loan amortisation schedule. Long-term investment analysis: nature and scope of capital budgeting; cash flow estimation, capital budgeting techniques, risk considerations in capital budgeting. Basics of valuation and cost of capital: valuing common stocks, preferred stocks and ordinary bonds, calculating costs of stocks and bonds; determining the weighted average cost of capital (WACC). Finding the optimal capital budget using the MCC and MRR curves. Introduction to capital structure decision: rationale for low cost debt funds; reasons behind non-availability of unlimited low cost debt funds----bankruptcy, agency cost and asymmetric information conditions; finding the optimal capital structure.
(Prerequisite: MAT 211, BUS/MAT 202)

FIN 301 Business Finance I (3 credits)
Financial planning and control: purpose of financial planning and control; Pro forma balance sheet model of financial planning; financial control----operating and financial breakeven analyses, operating and financial leverage. Working capital management: working capital policy; management of cash and marketable securities; receivable management; inventory management. Short-term financing: sources of short-term financing----accruals, accounts payable, short-term bank loans; choosing a bank; use of receivables and inventory as security in short-term financing. Long-term financing decision: common stocks, preferred stocks, bonds, and leasing.
(Prerequisite: FIN 201)

FIN 302 Business Finance II (3 credits)
Risk and return: estimation of risk and return using statistical tools; Markowitz's efficiency portfolio model and Sharpe's tangency portfolio (CAPM). Leverage and capital structure decisions: effect of debt-equity ratio on stockholders' return; operating and financial leverage and their relation to changes in fixed cost funds; Modigliani-Miller (MM) irrelevance theory----assumptions, validity and proof; MM with taxes; effects of financial distress, agency cost and asymmetric information on MM theory; finding the optimal capital structure. Dividend policy: Target payout policy; investors' preference between dividend and capital gains, MM dividend irrelevance theory, Bird in the hand theory, tax preference theory; other issues in target payout decision---signalling hypothesis, clientele effects, changing dividend preference and agency cost. Dividend stability. Maintaining stock price stability---- repurchase, stock splits and stock dividend. Bankruptcy, reorganisation and liquidation: financial distress and its consequences; settlement of short-term formal bankruptcy; reorganisation in bankruptcy; prediction and analysis of potential bankruptcy. Business combination and analysis of mergers: forms of business combination, rationale for mergers, ways of mergers, forms of mergers; Setting the bid price; determining the exchange ratio and post merger dilution of earnings; post merger EPS. Introduction to International financial management: Growth of multinational companies in the advent of globalisation; exchange rate, direct and indirect quotes of exchange rate, cross exchange rate; international monetary system; exchange rate fluctuations; currency devaluation and revaluation, convertible currency; trading in foreign currency---spot rate, forward and options; Euro dollar market; international bond markets; investment analysis of multinational companies.
(Prerequisite: FIN 301)

FIN/ACN 305 Financial Accounting (3 credits)
Analysis and interpretation of accounting reports of business and industry. Measurement of income. Control of cash. Analysis and interpretation of financial and investment. Analysis of cash flow statement . Application of funds. Contrast between accounting and economic concept of income. Consolidate financial statements. Measurement and reporting of stockholders equity paid-in capital and retained earning. Bonds payable and bond investment . Stock investment. Cash investment. Consolidation and reporting for partnerships and sole proprietorship. Impact of various accounting methods on the reported results of the firm.
(Prerequisite: ACN 301)

FIN 401 Banking and Finance (3 credits)
The banking and financial system. Theory of financial intermediation. Models of the banking firm. Theory of the bank regulation. Partial regulation of the Bangladesh financial system. Bank performance and probability analysis and interest rate margins. Various types of loans, credits / lending policies, repayment schedule, the bullet-pill. continuum of multiple credit creation and float management. Different types of financial instruments. Export-Import financing . Competition in banking, State supervision of banks and non-banks. The operation of monetary policy.
(Prerequisite: FIN 301)

FIN 405 Management of Financial Institution (3 credits)
Sources of money. Money and capital markets. Financial institution BSB, BSRS, ADB, WB, commercial banks , financial companies, etc. How they operate, lending procedures, criteria for loans, terms and conditions, fund utilization. Management of funds of the financial institutions.
(Prerequisite: FIN 301)

FIN/MGT 440 Risk and Insurance Management (3 credits)
Introductory: Origin and history – Definition – Nature – Scope – Role and social values of insurance – Insurance contracts – Principles – Essentials of an insurance contract. Life Assurance: Life assurance contract – Kinds of policies and annuities – procedure of effecting life assurance – Claims and settlement – Procedures – Premium – Premium plans – Computation of net single premium – Mortality rate reserve – Calculation of reserve – Surplus and its distributions. Marine Insurance: Subject matters – Marine insurance Contract – Types and policies – Marine losses claims and settlement. Fire Insurance: Fire insurance contract – claims and settlements – Reinsurance. Miscellaneous Insurance: Group insurance – Personal insurance – Accident insurance – Automobile insurance. Risk Definition: Classification – Insurance as device for handling risk – Objectives of risk management – peril – Hazard. Insurance Business in Bangladesh: Present pattern of insurance industry – Jiban Bima Corporation – Sandhani Bima Corporation – Postal Life Insurance – American Life Insurance Company – Other Private Insurance companies.
(Prerequisite: BUS 360, MGT 201)

FIN 460 Investment Management (3 credits)
Introduction to investment: forms of investment, setting investment objectives, measuring investment risk and return. Security markets: market efficiency; organisation and operations of primary and secondary markets, distribution, syndication, listing requirements in the secondary market, membership of market participants, over the counter markets. Participating in the securities market: price performance of securities---price weighted, value weighted and equal weighted indexes, international stock indexes and base year comparison. Industry analysis: the industry life cycle; industry structure analysis----competitive and economic structure; industry trend analysis, rotational investment; sustainable growth model. Basic stock valuation concepts: dividend valuation model----constant and non-constant growth models; earnings valuation model, analysing P/E ratio for stock valuation. Investment in special situation: special/abnormal returns, ----mergers and acquisitions, new issues, stock repurchases; book value market value effect in explaining abnormal return. Bonds and fixed investment fundamentals: features and forms of bonds, bond market investors, distribution, other forms of fixed income securities--- CD, commercial papers, money market funds etc. Bond valuation and investments: current yield, yield to maturity, yield to call; term structure of interest rates, theories explaining the yield curve. Duration and reinvestment concepts: duration and price sensitivity. Reinvestment. Convertibles and warrants: conversion price, conversion ratio, conversion value, pure bond value, bond price and premium, downside risk. Warrants; intrinsic value and breakeven value. Accounting considerations with convertibles and warrants. Mutual funds: open vs. close end funds, load vas. No load funds, front end load vs. back end load funds; premium and discounts on net asset value, distribution and taxation; total return on mutual funds investment. Real asset investment: Real estate and mortgage plans, forms of real estate investment; precious metals, gold, silver, precious gems; other collectibles. Portfolio management: Markowitz's mean-variance analysis, capital asset pricing model, roles and responsibilities of portfolio manager.
(Prerequisite: FIN 302)

FIN 461 Financial Derivatives (3 credits)
Introduction to financial derivatives: derivatives, financial derivatives----forward, futures options and swaps; applications of financial derivatives; the concept of arbitrage. Forward and futures market: organisation of forward and futures markets; the basics of forward and future contracts; valuation (pricing) of forward and futures; convenience yields, term structure of futures prices and basis risk, volatility of futures prices; arbitrage----“cash and carry” and “reverse cash and carry.” Hedging with futures: long and short hedges, cross hedging, risk minimising hedge position. Futures on special items: stock futures, foreign currency futures, fixed income securities futures etc. Options markets: the options contract; put vs. call options; American vs. European options; money ness; organisation of the option market----participation, margins and commissions, long vs. short positions. Stock market option contracts: prices of options, intrinsic value, premiums and discounts on options, determinants of option value. Option pricing models: the binomial options pricing model----single period, two period and multiperiod models; Black-Scholes option pricing model----properties, requirements and application. Risk management with options: hedging with Delta, Gamma, Theta, Vega and Rho values. Other important options contract: stock index options and options on futures. Swaps market: the swap contract, types of swaps, and the swap market. Plain vanilla swaps---- foreign currency swaps and interest rate swaps; motivation for swaps; pricing of swaps.
(Prerequisite: FIN 302)

FIN/ECN 470 International Finance (3 credits)
Analysis of the impact of international trade and payments on price formation, allocation of resource, economic welfare, and the level of economic activity in trading countries. Political considerations. Full employment, effects and considerations. Price stability. Economic growth. Free trade. Fixed and flexible exchange rates. Capital Mobility. Equilibrium on the balance of international payments.
(Prerequisite: FIN 201)

FIN / MGT 480 International Financial Management (3 credits)
Environment of International financial management: Introduction to Multinational enterprise and multinational financial management; exchange rate determination and international monetary system; balance of payment and international economic linkages; the foreign exchange market----forward, futures and options; parity conditions and currency forecasting. Multinational Working capital management: short-term financing of MNCs; financing foreign trade; current asset management of MNCs; management of multinational financial system. Foreign Investment analysis: Foreign direct investment and corporate strategy; capital budgeting for MNCs; the cost of capital for foreign direct investment. International financing and international financial market: International stock market, Eurodollar market, eurobonds, foreign bonds etc.
(Prerequisite: FIN 201)