BØK 3423 Finance

BØK 3423 Finance

Course code: 
BØK 3423
Department: 
Finance
Credits: 
7.5
Course coordinator: 
Siv Jønland Staubo
Product category: 
Bachelor
Portfolio: 
Bachelor - Core Courses
Semester: 
2020 Spring
Active status: 
Active
Teaching language: 
Norwegian
Course type: 
One semester
Introduction

This introductory course in finance focuses primarily on the investment side of the subject of finance. The purpose of the course is to equip students with necessary knowledge about terms and methods used in order to make sound investment decisions. It should be mentioned that the methods taught are applicable to both financial investments (stocks and bonds) and real investments (production facilities, equipment etc.).Additionally the course will focus on sustainable investment decissions.

Learning outcomes - Knowledge

During the course students should develop knowledge of:

  • The role of investment analysis in finance.
  • Why we focus on cashflows and not on earnings.
  • The economic content/meaning of cashflows.
  • The concepts underlying the time value of money.
  • What is meant by the term discount rate/cost of capital.
  • The meaning of, and difference between, the different decision criteria for an investment/financing oppurtunity. Notably the NPV, IRR, Payback etc.
  • Understand the impact of sustainable investment decissions.
  • How capital rationing affects the investment decision for real investment oppurtunities.
  • How one can use the above mentioned decision criteria in order to value financial investments like bonds and stocks as well as real investment oppurtunities.
  • UWhat is meant by total risk, relevant risk and irrelevant risk.
  • The portfolio theory and its impact on what we call diversification benefits - on a conceptual level,
  • What is meant by Beta and how to interpret its size.
  • The Capital Asset Pricing Model (CAPM) and how this is derived - on a conceptual level,
  • What is meant by the Weighted Average Cost of Capital (WACC) and when this should be used.
  • The value of flexibilty in investment oppurtunities - on a conceptual level,
Learning outcomes - Skills

Upon completion of the course the students should be able to:

  • Budget cash flows.
  • Apply the different rules for discounting and compounding with the help of a financial calculator, Excel or interest rate tables.
  • Understand the economic content in sustainable decision criteria for an investment/financing oppurtunity.
  • Distinguish among the different decision criteria.
  • Apply the different decision criteria on real investment oppurtunities with or without capital rationing.
  • Apply the different decision criteria on financial investments like bonds and stocks.
  • Apply the portfolio theory on different investment opportunities.
  • Calculate Beta.
  • Derive the Capital asset Pricing Model (CAPM) on an intuitive level.
  • Apply the Capital Asset Pricing Model (CAPM).
  • Calculate the Weighted Average Cost of Capital (WACC).
General Competence

In the course there will be focus on the assumptions underlying the different theories covered. Hence, it is expected that students will have a critical attitude towards the realism of these. The students should upon completion of the course have a good understanding of the practical and international aplicability of the theories covered.

Course content
  • Introduction - How the course fit into the subject of finance.
  • Cashflows.
  • Time value of money.
  • Capital budgeting (Net Present Value, Internal Rate of Return, Payback etc.).
  • Capital rationing.
  • The pricing of bonds.
  • The pricing of stocks.
  • Introduction to risk.
  • The Capital Asset Pricing Model (CAPM).
  • Weighted Average Cost of Cpital (WACC).
Teaching and learning activities

There will be 11 3-hours lectures and lecturer-guided problemsolving sessions. thes lectures are supported by about 30 videos explaining theory and discussing problems. In order to stimulate the learning environment the lecturer will seek two ways communication with the students. Students should feel responsible for class participation by asking questions. There will be 3 3-hours tests assisted by the lecture and students assistents.

Although software tools is not a requirement, it may be useful to do some tasks from the syllabus which require the use of Excel.

E-learning
When course is delivered online, lecturer, in cooperation with the Academic Servises Network, will organize an appropriate combination of digital teaching and lectures. Online students are also offered a study guide to contribute to progression and overview. Total recommended time spent for completing the course also applies here.

Software tools
No specified computer-based tools are required.
Qualifications

Higher Education Entrance Qualification.

Required prerequisite knowledge

Basic course in mathematics and statistics or equivalent.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
BØK34231
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination every semester
100Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Interest table
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:100
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Interest table
Duration:3 Hour(s)
Comment:
Exam code:BØK34231
Grading scale:ECTS
Resit:Examination every semester
Type of Assessment: 
Ordinary examination
Total weight: 
100
Student workload
ActivityDurationComment
Teaching on Campus
6 Hour(s)
Feedback activities and counselling
27 Hour(s)
.
Prepare for teaching
110 Hour(s)
Student's own work with learning resources
54 Hour(s)
Examination
3 Hour(s)
Sum workload: 
200

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.