The University of Tennessee, Knoxville

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Finance Undergraduate Courses

The following is a selected list of classes offered by the Department of Finance. For a full list of courses offered by the department, check the University catalog and timetable.  Click on the appropriate link below for a description of each course’s content.

For questions about class prerequisites or co-requisites, please check with the Undergraduate Business Programs Office at 865-974-5096 or go to http://bus.utk.edu/undergrad/advising/index.htm.

Financial Management (FINC 300)

 


 

This class is composed of lectures, reading assignments, homework, bonus assignments, Excel competency assignments, honors contracts, and exams. Note: Excel/spreadsheet competency must be measured and documented through assignments to include financial statement analysis, stock analysis, and capital budgeting problems. Finance 300 stresses financial management fundamentals or principles that apply equally well around the world and in the context of both business and personal finance. However, where international institutional and cultural differences are relevant, they are highlighted and discussed in the text and in lectures. Students can expect lectures, reading assignments, coverage of current events (mostly from industrial guest speakers), Excel/spreadsheet projects, and exams.

Topics to be covered

Organizational Structures:
Business, Tax and Financial Environments, U.S. vs. foreign firms goals/missions and corporate structures, Corporate Social Responsibility (CSR) including sustainability, depreciation methods

Financial Assets:
Money market, capital market, yield curve, interest rates, types of foreign and domestic securities, short-term, intermediate, and long-term (e.g., British Consol bonds, Eurodollar CDs, Euro CP, etc.), interest payment differences between foreign and domestic bonds (e.g., annual vs. semiannual)

Valuation:
Time value of money, liquidation vs. going concern value, valuation of bonds, preferred stock and common stock

Risk and Return Basics:
Expected return, variance, covariance, CAPM

Capital Budgeting:
Estimating cash flows, NPV, payback, IRR, profitability index

Financial Statement Analysis:
Analysis of the key financial statements (e.g., ratios, common-size, indexed), international accounting standards

Personal Finance:
Insurance (life, auto, disability), credit/banking (managing credit, credit cards, debit cards, FICO score), Personal savings and investments (CDs, mutual funds, pension)

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Financial Management (FINC 301)

 


 

This class is composed of lectures, reading assignments, homework, bonus assignments, Excel/spreadsheet competency assignments, honors contracts, and exams. Finance 301 stresses financial management fundamentals or principles that apply equally well around the world. However, where international institutional and cultural differences are relevant, they are highlighted and discussed in the text and in lectures. Students can expect lectures, reading assignments, coverage of current events (mostly from industrial guest speakers), Excel/spreadsheet projects, and exams.

Topics to be covered

Organizational Structures:
Business, Tax and Financial Environments, U.S. vs. foreign firms goals/missions and corporate structures, Corporate Social Responsibility (CSR) including sustainability, depreciation methods

Financial Assets:
Money market, capital market, yield curve, interest rates, types of foreign and domestic securities, short-term, intermediate, and long-term (e.g., British Consol bonds, Eurodollar CDs, Euro CP, etc.), interest payment differences between foreign and domestic bonds (e.g., annual vs. semiannual)

Valuation:
Time value of money, liquidation vs. going concern value, valuation of bonds, preferred stock and common stock

Risk and Return Basics:
Expected return, variance, covariance, CAPM

Capital Budgeting:
Estimating cash flows, NPV, payback, IRR, profitability index

Financial Statement Analysis:
Analysis of the key financial statements (e.g., ratios, common-size, indexed), international accounting standards

Working Capital Management:
Administration of the firm’s current assets and the financing needed to support current assets

Cost of Capital:
Determining weighted average cost of capital, cost of debt, cost of equity, cost of preferred stock, basic cost of capital calculations for foreign firms

Capital Structure and dividend policy:
Optimal capital structure, financial leverage, business and financial risk

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Investment and Portfolio Management (FINC 425)

 


 

This class is composed of lectures, discussions, projects/ assignments, and select readings. Training in Bloomberg is required of all students taking this course. Competency in the use of Excel/spreadsheet analysis is reinforced via projects and/or assignments. A skills test on basic financial concepts is required. The objectives of this course are to provide a rigorous introduction to the fundamental principles and concepts of the valuation of financial assets in competitive and efficient financial markets and to encourage development of the technical and analytical skills needed to perform risk and return analysis of portfolios of financial assets. Globalization of our securities markets, the number of publicly traded multinational firms, and the impact of international assets in a well-diversified portfolio will be covered.

Topics to be covered

Introduction to Capital Markets and Financial Securities:
Real versus financial assets; careers in investments, steps in the investment process; investor’s life cycle, introduction to marketable risky assets (stocks, bonds, money market, derivatives, ETFs); Tax Equivalent Yield, direct and indirect investing (investment companies)

Mechanics of Securities Markets and Trading:
Primary vs. secondary markets, IPO process, secondary offerings, private placement, exchanges (stock, bond, derivative, ECN), indices, types of orders, margin, short selling

Asset Pricing and Efficient Markets:
Measuring ex-ante vs. ex-post returns, arithmetic vs. geometric mean, cumulative wealth index, statistical properties of returns/risk, Markowitz Modern Portfolio Theory, diversification, CML and SML/CAPM

Equity and Bond Valuation:
DCF analysis (including constant and non-constant equity growth models), ROE, P/E, bond ratings/credit profiles, duration, convexity, market efficiency and technical analysis

Options/Derivative Securities:
Payoff/Profit profiles, strategies, basic components of valuation (i.e., introduction to components of Black-Scholes Option Pricing Model)

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Financial Markets and Institutions (FINC 435)

 


 

This class is composed of lectures by the instructor as well as outside speakers, readings, discussions, and other methods as necessary to convey the material.

Job Preparation: To develop a perspective with which to examine current and future job problems on one’s own. We often start such analysis using the concept of a multiproduct global financial-services firm (FSF). Depending on the problems we study, this FSF may or may not be subject to the restrictions that legally distinguish different financial-institution types.

Career Orientation: To prepare managers for continuing change in their work environment by communicating an evolutionary perspective on the roles that changing information technology and changing patterns of regulation play in reshaping FSFs.

Regulatory Awareness: To explain how rules and patterns of enforcement set by private and governmental financial regulators (including international ones) are molded by political pressure and market forces. Use of Bloomberg is encouraged.

Topics to be covered

International securities markets:
Term structures of foreign currency rates
Foreign exchange markets

International Banking:
Regulation of international banking
Structure of large, complex financial institutions

Microstructure and related topics:
Managing foreign exchange risk
Regulation of international markets

What’s special about banks?
Interest rates and security valuation
The Federal Reserve and monetary policy
Money markets/Foreign exchange markets
Commercial and investment banks
Mortgage markets and the financial crisis
Risks in financial intermediation/Risk management:
Interest rate risk; credit risk; foreign exchange risk

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Debt and Derivatives (FINC 445)

 


 

This class is composed of lectures, reading assignments, coverage of current events, problem sets that include extensive Excel/spreadsheet application, and exams. Use of Bloomberg is encouraged. This course is a rigorous introduction to derivatives securities with particular emphasis on their application to fixed income markets. In particular, students will be introduced to futures and forwards contracts, swaps, and call and put options. Topics include the economic role of derivatives, valuation of derivatives, derivative trading strategies, and the management of corporate risk with derivatives. Emphasis will be placed on real-world applications of theoretical and conceptual material discussed in class. Derivative security markets are an exciting, innovative, and growing segment of financial markets. Business students entering today’s competitive job market will certainly benefit from increased exposure and a more in-depth understanding of both derivatives and fixed income investments.

Topics to be covered

Introduction to Derivatives Markets:
Futures and forwards, options, trading platforms (Open Outcry, electronic trading, OTC, etc.), law of one price

Arbitrage and Hedging Strategies using Futures:
Long and short hedges, cross hedging, basis risk, hedging and equity portfolio, rolling the hedge forward, pricing futures and forwards, consumption vs. investment assets, arbitrage conditions involving income or storage costs

Interest Rates and Bond Pricing:
Continuously compounded interest rates, bond pricing, constructing the zero curve, calculating forward rates, Term structure of interest rates (applicable theories)

Swaps:
Interest rates and currency swaps

Options and Option Trading strategies:
In-depth discussion of call and put options, payoff structures, developing option strategies, covered calls, protective puts, and straddles, etc.

Option Pricing:
Black-Scholes, Binomial Tree, the Greeks

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Financial Management: Theory and Practice (FINC 455)

 


 

This class is composed of lectures, reading assignments, homework, Excel/spreadsheet assignments, quizzes and exams. Decision-making topics in financial management will be covered, including valuation, capital budgeting under uncertainty, cost of capital, and capital structure theory. The course will include a major writing requirement. To the extent that international institutional and cultural differences are relevant, they are highlighted and discussed. Students will be expected to develop and demonstrate competency in using spreadsheets to perform financial analysis through projects and assignments. Use of Bloomberg is required.

Topics to be covered

(A diagnostic tool will be used at the start of the semester to test student competency in Principles of Finance and Investments Concepts)

Financial Statements:
Review of concepts, Excel functions, ratio analysis

Stock and Bond Valuation:
Review, determining WACC, corporate valuation
International component--Free cash flow valuation of multinational operations

Capital Budgeting:
Review, Excel functions, evaluation
Calculate after-tax project cash flows for complex projects
Use Excel/spreadsheet software to perform capital budgeting analysis and sensitivity analysis
International component--Determine cost of capital for both domestic and international firms

Capital Structure:
Theory, pro forma evaluation, and capital restructuring (which could include dividends, share repurchases, SEOs, and debt issues, etc.)

Corporate Governance:
International component--Major differences in international corporate governance, including cross-country differences in capital structure and dividend policy

Mergers and Acquisitions:
Free cash flow merger valuation and analysis

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Enterprise Risk Management (FINC 463)

 


 

This class is composed of lectures, outside speakers, reading assignments, homework, Excel/spreadsheet assignments, quizzes and exams. The objectives of this course are for students to understand the different areas of enterprise risk management and to prepare for careers in enterprise risk management.

In particular, the course requires students to assess and manage different sources of risk by using @Risk, a Monte Carlo simulation package that is used by over 80% of Fortune 500 companies.

Students are exposed to international topics because many sources of risk are due to international factors, including foreign exchange risk. Use of Bloomberg is encouraged.

Topics to be covered

Overview of Enterprise Risk Management
Behavioral Biases and Risk Management Implementation
Risk Management Tools (including Monte Carlo Simulation)
Measuring and Managing Project Selection Risk
Project Financing from a Lender's View
Measuring and Managing Commodity Price Risk
Measuring and Managing Foreign Exchange Risk

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Real Estate Finance and Investment (FINC 485)

 


 

This class is composed of lectures, reading assignments, coverage of current events (mostly from industrial guest speakers), Excel projects, and exams. Use of Bloomberg is encouraged. This course will consider the unique legal, institutional and economic characteristics of real estate and its market. Specifically, both the financial and market analysis of real estate investments will be explored in detail. In addition, issues of discrimination in mortgage lending and housing markets will be explored as part of a discussion of government policy in these areas.

Topics to be covered

The Distinguishing Economic Characteristics of Real Estate Markets:
Overview of those factors that make real estate different from other markets, and therefore worthy of its own course

Financial Feasibility of a Real Estate Investment:
Consideration of the discounted cash flow analysis of real estate including NPV, IRR, and risk analysis

Financial Leverage and Debt Structure:
Consideration of the impact that these have on project profitability and financial risk of project

Real Estate Construction and Development:
Exploration of the financing, cash flow, risk analysis and market analysis that are unique to construction and subdivision development

Market Analysis:
Consideration of both the practical considerations and urban economic theories that are the basis for the market analysis required when making a real estate investment.

Urban Economic Policy Issues:
Discussion of the economic issues and resulting laws and government economic policies important to economic land markets; for example: zoning and land use controls, housing policy, optimal structure for urban government, etc.

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International Business (IB 449)

 


 

This class is composed of lectures, reading assignments, coverage of current events (mostly from The Wall Street Journal) homework, quizzes, and exams. Use of Bloomberg is encouraged.

IB 449 emphasizes both the markets and management of foreign exchange for multinational firms in an international finance framework. This is accomplished both through rigorous lectures and coverage of current events related to the lectures covered in class. Differences in the U.S. structure to other countries are highlighted throughout the class.

Topics to be covered

Foreign Exchange (FX) Market:
Overview of the FX market and the different exchange rate systems around the globe

International Transactions & FX Determination:
Balance of Payments, International parity conditions and forecasting

FX Tools:
Coverage of Forwards, Futures, Option, and Swaps

FX Management:
Hedging techniques to manage FX and interest rate exposure for a multinational firm

International Debt/Equity:
International capital markets, both debt and equity, as well as international investment alternatives, both at the firm and individual level

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Department of Finance ~ 427 Stokely Management Center ~ 916 Volunteer Blvd ~ Knoxville, TN 37996-0540
Phone: 865-974-3216 ~ Fax: 865-974-1716 ~ E-Mail: finance@utk.edu

 

The University of Tennessee, Knoxville. Big Orange. Big Ideas.

Knoxville, Tennessee 37996 | 865-974-1000
The flagship campus of the University of Tennessee System