BØK 1121 Finance I
BØK 1121 Finance I
Finance deals with the saving and investment of businesses, individuals and authorities, and intervenes in all parts of society. This introductory course in finance focuses primarily on the investment side of finance, and includes financial investments (shares and bonds), so-called real investments (developments, etc.), as well as the importance of sustainable investment decisions. The students acquire knowledge and skills to make investment decisions that are relevant both for companies, authorities and private individuals.
The study connects theory and practice by analyzing realistic examples with Excel. In this way, the students will also acquire useful experience for analyzing investment projects in working life later on.
After completing the course, students must:
- Understand the importance of cash flows for the analysis of investment projects
- Understand that cash flows received at different times have different value (discounting) and the importance for the valuation of investment projects
- Understand what relevant risk is, and thus the benefits of diversification, and how it affects the cost of capital for investments.
- Understand different financial securities, especially stocks and bonds, and how their prices are formed in markets.
After completing the course, students should be able to:
- Budget cash flows, both according to the equity method and the total capital method.
- Apply the various discounting rules, both with the help of a calculator and Excel, to value investment projects and calculate the value of financial instruments such as shares and bonds
- Calculate capital costs, including applying the Capital Value Model, and create simple portfolios
- Calculate the profitability of investment projects (especially Net Present Value).
The course focuses on understanding the assumptions used to determine the profitability of investment projects. Insightful application requires knowledge of the models' relevance and practical limitations.
Through group work, and associated learning activities, students will develop the ability to work together in groups. More specifically: commenting on work, reflecting on comments, and collaboratively implementing changes.
- Introduction – Placement of the course's content in the finance subject
- Interest calculation ("financial mathematics") and application to the pricing of shares and bonds
- Portfolio theory, diversification and risk
- The capital value model: Price of risk in financial markets and significance for investment projects' cost of capital
- Review of a realistic case for investment analysis, including creating cash flows and applying profitability criteria.
The course consist of 15 sessions of 2 hours each (30 hours) are lectured in the auditorium/classroom. These 15 sessions are supported by videos that review theory and issues. In order to stimulate a good learning environment, two-way communication with the students is planned. The students are responsible for participating in the teaching with questions, comments and discussion. During the course, several tasks and tutorials are set up, including 2 tests with follow-up from student assistants, as well as several tasks that the students receive automatic feedback on.
There is extensive use of Excel in the course. The course ends with a case and a group submission that requires a solution in Excel. Students are therefore strongly encouraged to complete the online course in Excel before this course starts.
From spring 2025, the form of evaluation will change from:
- 3-hour individual school exam (Exam code BØK 11211) weighting: 100%
to:
- Assignment in groups over one semester (Exam code BØK 11212), weighting: 40%
- 2 hour individual school exam (Exam code BØK 11213), weighting: 60%
Re-sit examination in Exam code BØK 11211, weighting: 100% will be offered in autumn 2024 and for the last time in spring 2025.
Higher Education Entrance Qualification
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
Basic course in accounting, mathematics and statistics or equivalent.
| Assessments |
|---|
Exam category: Submission Form of assessment: Submission other than PDF Exam/hand-in semester: First Semester Weight: 40 Grouping: Group (1 - 4) Duration: 1 Semester(s) Exam code: BØK11212 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: School Exam Form of assessment: Structured Test Exam/hand-in semester: First Semester Weight: 60 Grouping: Individual Support materials:
Duration: 2 Hour(s) Exam code: BØK11213 Grading scale: ECTS Resit: Examination every semester |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 30 Hour(s) | 15 lectures of two hours duration. |
Digital resources
| 15 Hour(s) | |
Feedback activities and counselling | 8 Hour(s) | |
Prepare for teaching | 70 Hour(s) | |
Student's own work with learning resources | 27 Hour(s) | |
Group work / Assignments | 20 Hour(s) | |
Examination | 30 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.