You’d be hard pressed to find a menu of finance courses for MBAs that is deeper and more varied than the course catalog at Wharton. All told, the school offers 49 courses in finance that range from such typical options like “Corporate Finance” and such cutting-edge courses like “Behavioral Finance” and “Venture Capital and The Finance of Innovation.”
FNCE601 – Corporate Finance
This course serves as an introduction to business finance (corporate financial management and investments) for both non-majors and majors preparing for upper-level course work. The primary objective is to provide a framework, concepts, and tools for analyzing financial decisions based on fundamental principles of modern financial theory. The approach is rigorous and analytical. Topics covered include discounted cash flow techniques; corporate capital budgeting and valuation; investment decisions under uncertainty; capital asset pricing; options; and market efficiency. The course will also analyze corporate financial policy, including capital structure, cost of capital, dividend policy, and related issues. Additional topics will differ, according to individual instructors.
Prerequisites: ACCT 620 or 621; Co-Requisites: MGEC 621 and STAT 621 prerequisite or concurrent.
FNCE602 – Macroeconomics and the Global Economic Environment
This course is required of all students except those who, having prior training in macroeconomics, money and banking, and stabilization policy at an intermediate or advanced level, can obtain a waiver either by credentials or by passing an examination. The purpose of FNCE 602 is to train the student to think systematically about the current state of the economy and macroeconomic policy, and to be able to evaluate the economic environment within which business and financial decisions are made. The course emphasizes the use of economic theory to understand the workings of financial markets and the operation and impact of government policies. Specifically, the course studies the determinants of the level of national income, employment, investment, interest rates, the supply of money, inflation, exchange rates, and the formulation and operation of stabilization policies.
FNCE603 – Basics Of Finance
FNCE 603 prepares students for the basic corporate finance class, FNCE 601. It covers the fundamental characteristics of stocks, bonds, and options and net present value. The course will demonstrate how to use Microsoft Excel and a financial calculator to perform these calculations.
FNCE604 – Preparation Course for the Corporate Finance (FNCE 621) Placement Exam
This course is intended for those students wishing to prepare for the Placement Exam into FNCE612. The FNCE612 course will fullfill the core requirement in financial analysis in half a semester, instead of the usual full semester in the FNCE 611 course. Only the students with some prior knowledge of financial analysis (either by course work or by practical experience), or with some strong analytical backgrounds should consider taking this course and the Placement Exam. Together FNCE 604 and FNCE 612 form the foundation for subsequent courses in corporate finance, security analysis, investments, and speculative markets. Their purpose is to develop a framework for analyzing a firm’s investment and financing decisions. FNCE 604 will provide an introduction to present value and capital budgeting techniques under certainty. The FNCE 612 course will start where FNCE 604 stops, and will cover capital budgeting techniqes under uncertainty, asset valuation, the operation and efficiency of capital markets, and the optimal capital structure of the firm
Prerequisites: Since the emphasis is on the fundamental concepts underlying modern finance, the approach in both FNCE 604 and FNCE 621 will be analytical and rigorous, and requires some familiarity with accounting, mathematical, and statistical tools.
FNCE611 – Corporate Finance
Prerequisites: ACCT 620 or 621; Co-Requisites: MGEC 621 and STAT 621 prerequisite or concurrent.
FNCE612 – Accelerated Corporate Finance
FNCE613 – Macroeconomics & Global Economics
FNCE621 – Financial Analysis (half semester)
This course is intended for people with prior knowledge of financial analysis or with strong analytical backgrounds. It assumes that students are completely familiar with the material covered in the pre-term placement preparation course, FNCE 604. As a result, it is only available to those students who successfully passed the Finance Placement Exam at the end of the Pre-Term. The course forms the foundation for subsequent courses in corporate finance, security analysis, investments, and speculative markets. Its purpose is to develop a framework for analyzing a firm’s investment and financing decisions. The course will provide an introduction to capital budgeting techniques under uncertainty, asset valuation, the operation and efficiency of capital markets, and the optimal capital structure of the firm. Furthermore, the course will exploit the students’ prior knowledge and/or quantitative backgrounds (as demonstrated in the Finance Placement Exam), and will cover all the topics of a typical semester-long finance introduction class in six weeks.
Prerequisites: ECON 701,ECON 898B, ECON 706A.
FNCE714 – American Financial Development
An examination of key phases, issues, and problems in American financial history from colonial period through the Great Depression.
Prerequisites: FNCE 602 or permission of instructor.
FNCE715 – Theory and Structure of Financial Markets
This course is an overview of the capital markets for students who wish to have a broad perspective. It is most appropriate for students who have not had extensive experience on Wall Street or in investment banking. The course begins with a discussion of the functions performed by the capital market. It then moves into the determination of the price of credit, i.e., the interest rate. Next, it develops the methodology used to value financial instruments that are actively traded. The course moves to a survey of the asset markets. It ends with an analysis of how institutions use these markets to manage, absorb, and control the risk they face.
Prerequisites: FNCE 601 or FNCE 621, MGEC 621 and STAT 621
FNCE716 Structure, competition and performance of banks and other financial institutions. Sources and uses of funds, liquidity, capital structure, and public policy.
FNCE717 – Financial Derivatives
The purpose of this course is to provide the student with the necessary skills to value and to employ options, futures, and related financial contracts. In order to provide a useful treatment of these topics in an environment that is changing rather rapidly, it is necessary to stress the fundamentals and to explore the topics at a technical level. The topics that will be covered include the valuation of futures contracts on stock indices, on commodities and Treasury instruments; the valuation of options, empirical evidence, strategies with respect to these assets, dynamic asset allocation strategies, or which portfolio insurance is an example, swaps, and the use (and misuse) of derivatives in the context of corporate applications. One-third of the course will be devoted to futures, a third to options, and a third to their applications. Many of the applications will be sprinkled along with the coverage of futures and options.
Prerequisites: FNCE 611 or FNCE 612; STAT 613: FNCE 613 may be taken concurrently.
FNCE719 – International Financial Markets
FNCE 719 is a course on international financial markets and exchange rates. Topics include pricing in the foreign currency and Eurocurrency markets, use of forward exchange for hedging, short-term returns and market efficiency in the international money markets, foreign currency options, international capital asset pricing, pricing of foreign currency bonds, currency swaps, Eurocurrency syndicated loans, foreign currency financing and exposure management.
Prerequisites: FNCE 611 or FNCE 612; FNCE613 may be taken concurrently.
FNCE720 – Investment Management
This course is designed to acquaint the student with the concepts of portfolio analysis in the general area of institutional investment management. The course discusses principles for managing financial assets. These principles apply, for example, to managing corporate pension funds, bank-administered trusts, and other institutional funds. Students will learn how to establish appropriate investment objectives, develop optimal portfolio strategies, estimate risk-return tradeoffs, and evaluate investment performance. Many of the latest quantitative approaches are discussed.
Prerequisites: FNCE 611 or FNCE 612; FNCE 613; STAT 613.
FNCE721 – Real Estate Investment: Analysis and Financing
This course provides an introduction to real estate with a focus on investment and financing issues. Project evaluation, financing strategies, investment decision making and real estate capital markets are covered. No prior knowledge of the industry is required, but students are expected to rapidly acquire a working knowledge of real estate markets. Classes are conducted in a standard lecture format with discussion required. The course contains cases that help students evaluate the impact of more complex financing and capital markets tools used in real estate. There are case studies and two mid-terms, (depending on instructor). Cross-listed with REAL 721.
Prerequisites: FNCE 611 or FNCE 612.
FNCE723 – Commercial Bank Management
When a corporation seeks to raise resources to finance investments, it can issue securities such as bonds or equities, or, alternatively, it can borrow from a bank. These two methods of raising capital are not identical. This course focuses on the role of banks in corporation finance and the special nature of bank loans. A key implication of the uniqueness of bank lending is that bank loans tend to be less liquid than bonds and equities. The illiquidity of bank loans creates important problems for banks including credit risk analysis, loan pricing, interest-rate risk management, and the regulation of banks. The course covers these topics and concludes with recent developments, including industry consolidation, nonbank competition, and expansion of bank powers.
Prerequisites: FNCE 601 or FNCE 621, FNCE 602
FNCE724 – Urban Real Estate Economics
Urban Real Estate Economics uses microeconomic theory to analyze the determinants of metropolitan real estate values and the demand and supply of real estate. The course analyzes location decisions of households and firms, land utilization, urban growth, and the impact of local and federal government policies on urban development and real estate values. A market analysis project, using actual portfolio data, is required along with a midterm and second exam.
Prerequisites: MGEC 621 Managerial Economics
FNCE725 – Fixed Income Securities
FNCE 725 is a rigorous study of fixed income securities, including default-free bonds, floating rate notes, and corporate bonds. Closely related financial instruments such as forwards and futures on fixed income securities, bond options, and interest rate swaps are also examined. In addition to analyzing specific types of fixed income securities, there will be an examination of the tools used in bond portfolio management.
Prerequisites: FNCE 611 or FNCE 612; FNCE 613; STAT 613.
FNCE726 – Advanced Corporate Finance
The objective of this course is to study the major decision-making areas of managerial finance and some selected topics in financial theory. The course reviews the theory and empirical evidence related to the investment and financing policies of the firm and attempts to develop decision-making ability in these areas. This course serves as an extension of FNCE 601. Some areas of financial management not covered in FNCE 601 a re covered in FNCE 726. These may include leasing, mergers and acquisitions, corporate reorganizations, financial planning, and working capital management, and some other selected topics. Other areas that are covered in FNCE 601 are covered more in depth and more rigorously in FNCE 726. These include investment decision making under uncertainty, cost of capital, capital structure, pricing of selected financial instruments and corporate liabilities, and dividend policy.
Prerequisites: FNCE 611 or FNCE 612; FNCE 613.
FNCE728 – Corporate Valuation
The focus of this course is on the valuation of companies. Topics discussed include discounted cash flow techniques and valuation using alternative valuation techniques such as price multiples. Emphasis is on developing the required information for valuation from financial statements and other information sources.
Prerequisites: Minimum of normal first-year courses in accounting, economics, statistics, and FNCE 611 or 612; FNCE 613 (further coursework in financial accounting such as ACCT 742 is very useful).
FNCE730 – Urban Fiscal Policy
The purpose of this course is to examine the financing of governments in the urban economy. Topics to be covered include the causes and consequences of the urban fiscal crisis, the design of optimal tax and spending policies for local governments, funding of public infrastructures and the workings of the municipal bond market, privatization of government services, and public financial systems for emerging economies. Applications include analyses of recent fiscal crises, local services and taxes as important determinants of real estate prices, the infrastructure crisis, financing and the provision of public education, and fiscal constitutions for new democracies using South Africa as an example.
Prerequisites: MGEC 621, FNCE 601
FNCE731 – International Corporate Finance
This course analyzes financial problems corporations face that result from operating in an international environment. Major topics covered are corporate strategy and the decision to invest abroad, forecasting exchange rates, international portfolio diversification, managing exchange risk, taxation issues, cost of capital and financial structure in the multinational firm, and sources of financing.
Prerequisites: FNCE 611 or 612.
FNCE732 – International Banking
This course focuses on international financial institutions and international banking activities. We will examine how current and historical events are reshaping the industry. We will focus on the basic analytics of managing a bank’s exposure to liquidity, credit, market and country risk. In addition, we will consider how to evaluate and compare the risk exposures and performance of individual banks. Throughout the semester we will discuss public policy issues such as international debt crises and regulation.
Prerequisites: FNCE 611 or 612; FNCE 613. One, but not both, can be taken concurrently.
FNCE733 – Financial Economics under Imperfect Information
General equilbrium and rational expectations. Foundations of the theory of information. Learning from prices in rational expectations equilibrium models. Moral hazard, adverse selection and signalling. Bidding theories.
Prerequisites: FIN 732
FNCE735 – Research seminar in Finance
This course may be offered (and taken by a student) several times a year with varying topics. A likely topic is: models of the banking firm.
FNCE738 – Capital Markets – formerly Funding Investments
This course examines the available corporate securities that firms can use to finance investment. The course will focus on: (1) the design of these securities (Why do bonds have embedded options? What is the role of preferred stock?); (2) the issuing process for these securities (What do investment banks do? Is the underwriting process important for the cost of capital?); (3) the pricing of these securities (How are credit risk in bonds and loans priced?) The securities covered include corporate and junk bonds, bank loans, common and preferred equity, commercial paper, securitization, as well as some recent innovations. Other topics include the role of embedded options in corporate bonds; the role of bank and loan covenants; the function of bond rating agencies; exchange offers; prepackaged bankruptcies; bankruptcy Chapter 11; workouts; debtor-in-possession financing; and pricing credit risk. The course is designed to be complementary to Advanced Corporate Finance and Fixed Income Securities.
Prerequisites: FNCE 611 or 612; FNCE 613.
FNCE739 – Behavioral Finance
There is an abundance of evidence suggesting that the standard economic paradigm – rational agents in an efficient market – does not adequately describe behavior in financial markets. In this course, we will survey the evidence and use psychology to guide alternative theories of financial markets. Along the way, we will address the standard argument that smart, profit-seeing agents can correct any distortions caused by irrational investors. Further, we will examine more closely the preferences and trading decisions of individual investors. We will argue that their systematic biases can aggregate into observed market inefficiencies. The second half of the course extends the analysis to corporate decision making. We then explore the evidence for both views in the context of capital structure, investment, dividend, and merger decisions.
Prerequisites: FNCE 611 or 612; FNCE 613. Recommended: FNCE 720 and FNCE 726.
FNCE740 – Monetray Theory
General equilibrium theory of money, interest, prices and output.
Prerequisites: ECON 703, ECON 704, ECON 706A-706B, or permission of instructor
FNCE741 – Advanced Topics in Money and Capital Markets
The money supply process. General equilibrium and financial intermediaries. Monetary policy in a stochastic environment. Interest rate determination.
Prerequisites: FIN 700.2
FNCE742 – Empirical Research and Financial Economics
Cross sectional tests of the CAPM. Time-series tests of the CAPM. Tests of the Arbitrage Pricing Model. Estimation of the term structure. Variance bounds tests. Tests of the consumption CAPM. Dividends and stock prices. Seasonality in stock price movements. Cross-sectional valuation models. Intra-day stock price movements.
Prerequisites: FIN 700.1, ECON 706A and 706B
FNCE744 – Advanced Financial Econometrics
Theory and applications to financial testing of the following methods: linear statistical model, statistical inference for nonlinear models, specification analysis, time-series analysis.
Prerequisites: FIN 742, FIN 732
FNCE745 – Real Estate Investment, Analysis and Financing
Theory and measurement of return and risk on real estate loans and equity investments.
FNCE747 – Urban Real Estate Economics
Analyzes theories of location decisions for the household and firm, land utilization, and urban growth and development.
FNCE748 – International/Multinational Corporate Finance
This course combines into one semester essential aspects of two-semester-long courses, International Finance (FNCE 719) and Multinational Corporate Finance (FNCE 731). The goal of the course is to address the special problems encountered by the international finance officer which include 1) the multiplicity of currencies, and attendant problems related to nominal contracts; 2) the misalignment of exchange rates vis-a-vis commodities prices and the attendant problems of competitiveness; 3) the partial segmentation of capital markets producing potential differences in costs of capital across the world; 4) the multiplicity of tax jurisdictions. These four issues will be addressed in this course with the objective of preparing the student to careers in corporations with large operations abroad or across borders, or to careers in international banks. Specific topics will be chosen among the following: 1) the foreign exchange market; 2) exchange rate behavior; 3) exchange rate forecasting; 4) international portfolio choice; 5) international accounting; 6) exchange risk exposure measurement; 7) currency hedging techniques; 8) capital budgeting; 9) sources of financing worldwide; 10) international taxation; 11) tax planning; and 12) intracorporate fund flows.
Prerequisites: FNCE 601 or FNCE 621
FNCE749 – International Corporate Finance
This half-semester course is provided for the benefit of students who will have taken FNCE 719 “International Finance” and wish to have some additional exposure to the corporate finance issues. Four dimensions characterize the special problems encountered by the international financial officer. They are 1) the multiplicity of currencies, and attendant problems related to nominal contracts; 2) the misalignment of exchange rates vis-a-vis commodities prices and the attendant problems of competitiveness; 3) the partial segmentation of capital markets producing potential differences in costs of capital across the world; 4) the multiplicity of tax jurisdictions. These fours issues will be addressed in this course with the objective of preparing the student to careers in investment banks, in corporations with large operations abroad or across borders, or to careers in international banks.
Prerequisites: FNCE 601 or FNCE 621 and FNCE 719
FNCE750 – Venture Capital and the Finance of Innovation
This course covers the finance of technological innovation, with a focus on the valuation tools useful in the venture capital industry. These tools include the “venture capital method,” comparables analysis, discounted cash flow analysis, Monte Carlo simulation, contingent-claims analysis, decision trees, and real options. The primary audience for this course is finance majors interested in careers in venture capital or in R&D-intensive companies in health care or information technology.
Prerequisites: FNCE 601 and FNCE 602 (FNCE 602 may be taken concurrently)
FNCE751 – The Finance of Buyouts and Acquisitions
The focus of this course is on buying (or acquiring controlling stakes in) firms. The main topics to be covered are mergers and friendly acquisitions, hostile takeovers and buyouts. Using case studies, the course surveys the drivers of success in the transactions. While issues regarding motive and strategy will be discussed, financial theory would be the main lens used to view these control acquiring transactions. This will allow students to (1) evaluate transactions through valuation approaches and (2) structure deals employing financial innovation as a response to legal framework and economic frictions. This course should be of interest to students interested in pursuing careers as private equity investors, advisors in investment banking and corporate managers that deal with these issues. This course will be demanding and assumes familiarity with valuation analysis.
Prerequisites: FNCE 611 or 612; FNCE 613; FNCE 726 may be taken concurrently.
FNCE890 – Advanced Study Project in Finance – REAL OPTIONS
FNCE891 – ADVANCED STUDY PROJECT – CORPORATE RESTRUCTURING
The objective of this course is to familiarize students with financial, legal and strategic issues associated with the corporate restructuring process. The main focus of the course will be on the restructuring of financially distressed firms. We’ll begin by reviewing the financial instruments commonly used by risky firms (leveraged loans and high-yield bonds) and learn to interpret the contracts that govern them. We’ll then survey a variety of restructuring methods (out-of-court workouts, exchange offers, prepackaged and pre-negotiated bankruptcies, Chapter 11 reorganizations, international insolvency practices) available to troubled firms and study the dynamics of the restructuring process through a number of historical and current case studies. Finally, we’ll consider distressed debt as an asset class and develop techniques for investing in distressed securities. The course will provide students with tools to value distressed companies, understand the legal framework governing bankruptcy and reorganization, and navigate the key strategic issues facing managers and investors in distressed companies. It willalso provide students with a specialized vocabulary and important facts about the restructuring industry, distress investing, and leveraged financial markets.
Prerequisites: FNCE 611 or 612; FNCE 613; FNCE 726 and FNCE 728 or permission of the professor.
FNCE892 – Financial Engineering
This class offers an advanced analysis of complex derivative pricing models. It aims to build an integrated framework allowing students to: 1) decide what factors (e.g., stochastic volatility, jumps, stochastic interest rates, credit risk) should be incorporated in a reasonable pricing model for the given derivative; 2) formulate a consistent model incorporating the chosen factors; 3) calibrate the model using market data; 4) price the derivative and identify a hedging strategy. To allow for sufficient flexibility, the class will not place any special emphasis on models leading to closed-form valuation formulas (such as the Black-Scholes model), relying instead on the generality afforded by the martingale approach and Monte-Carlo simulation. Students will be asked to implement the models introduced in the class using VBA and Crystal Ball (an Excel Add-In specifically designed for Monte-Carlo simulation).
Prerequisites: FNCE 717 and FNCE725, with a grade of A- or higher in each of these two classes. Students who do not satisfy this prerequisite should obtain the instructor’s permission to enroll.
FNCE893 – Global Monetary and Financial Institutions: Theory and Practice
Goal: Provide the future global manager and economist the knowledge on the inter-workings of financial markets and policies set by central banks, regulators and governments. The core of the course will connect between the micro-structure of financial markets, their institutional frameworks and the macroeconomy in the US, the EU and other countries. The course will heavily use the data and events of the 2007-2010 financial crisis. Requirements: Final and mid term examinations and a term paper that provides a description and analysis of one or more of the main topics for a certain country. References: Use one or more textbooks as well as additional books, reports and analysis that were recently published on each of the topics
Prerequisites: FNCE 611 or 612; FNCE 613; STAT 613.
FNCE894 – Managing Fixed Income Portfolios
The goal of this course is to teach you how to manage a real portfolio of Treasury, corporate and mortgage bonds. We begin by learning how to infer market forecasts from current bond prices. We use analytical models to find the market forecasts and the prices the market is offering for bearing the different types of risks. To implement the concepts learned in class, students will form teams to manage a paper portfolio using Barclays Point (formerly Lehman Point) a state-of-the-art portfolio management system. Your team will trade a $100 million portfolio of bonds for which your goal will be to outperform the Barclays Aggregate Index.
Prerequisites: FNCE 725.
FNCE895 – Private Equity.
The course will be a survey of the private equity asset class. Its objective is to provide an understanding of the concepts, agents, and institutions involved in the late stage corporate private equity market in the U.S. and around the globe. It will examine the buyout market and the activities of buyout funds from the differing perspectives of private equity investors, private equity fund sponsors, and managers of the portfolio companies. The course will be taught almost entirely with cases. Distinguished Wharton alumni in the private equity industry will be our guest speakers for many of the cases based on transactions they concluded. While this course is primarily intended for graduate students, admission may be granted to a limited number of interested undergraduate students. PLEASE NOTE: this course may be recorded for live or subsequent distribution, display, broadcast, or commercialization in any media, including video, audio, or electronic media. For additional information, see the course syllabus or contact the department.
Prerequisites: FNCE 726 and FNCE 751 or permission from the instructor.
FNCE896 – Finance in Europe
FNCE897 – Finance in Mid East & North Africa