EXC 2110 Basic Financial Management
EXC 2110 Basic Financial Management
Finance deals with the savings and investments of businesses, individuals and authorities; and permeates all parts of society. This introductory course focuses primarily on the investment side of finance, and introduces financial instruments (shares and bonds), and the so-called real investments (e.g., launch of new products). Part of the course will also be devoted to discussing the role of sustainability in investment decisions. The students will acquire the knowledge and skills to make investment decisions that are relevant for companies, authorities and private individuals.
The course connects theory and practice by analyzing real world examples with Excel. Therefore, the students will also gain valuable experience in analyzing investment projects that will generate a competitive advantage in their future working life.
During the course, students shall master the following skills:
- Understand the importance of cash flows for the analysis of investment projects
- Understand that cash flows received at different times have different (present) values (discounting), and the importance of this concept for the valuation of investment projects.
- Understand what is the relevant risk, and how it affects the cost of capital for investments.
- Understand different financial securities, especially shares and bonds, and how their prices are formed in markets.
After completing the course, students should be able to:
- Perform capital budgeting analysis and basic company valuation.
- Understand the various discounting rules and be proficient in project valuation and in the valuation of stocks and bonds. The theoretical understanding of these issues will be paired with a working knowledge of Excel applications.
- Understand and assess risk and the cost of capital
After taking the course, the students shall be able to ask critical questions and reflect on crucial assumptions and theories within the business economics field. The students will understand that cash flows received at different times have different (present) values (discounting), and will fully acknowledge the importance of this concept for the valuation of investment projects.
- Introduction – Investment decisions and the role of corporate finance.
- Interest rates and the valuation of stocks and bonds.
- Portfolio theory and risk.
- The Capital Asset Pricing Model: the pricing of risk in financial markets and its importance in the assessment of the cost of capital.
- Introduction to a real case-study on investment analysis.
The course is structured in 15 sessions of 2 hours each (30 hours) in the auditorium/classroom. These 15 sessions are supported by videos that review the theory. In order to stimulate a good learning environment, the students will actively participate to the course with questions, comments and discussion.
During the course, the students will be challenged with several tasks and tutorials, including 2 tests with follow-ups from student assistants, as well as several homeworks where the students will receive automatic feedback on.
The course will make extensive use of Excel, and will end with a case solved in small groups with Excel. Students are therefore strongly encouraged to complete the online course in Excel before this course starts.
Higher Education Entrance Qualification
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
Basic course in 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: EXC 21102 Grading scale: ECTS Resit: Examination every semester |
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: EXC 21103 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) | The teaching consists of 15 sessions of 2 hours each in the auditorium, supported by digital material to promote reflection and discussion. |
Digital resources | 15 Hour(s) | The course is supported by a number of asynchronous digital learning elements, such as videos and tasks. Self-study is expected on these components. |
Prepare for teaching | 70 Hour(s) | Including videos on theory, exercises and other tasks. |
Student's own work with learning resources | 27 Hour(s) | |
Group work / Assignments | 20 Hour(s) | The course ends with a comprehensive a graded case study. The students will work in small groups. |
Feedback activities and counselling | 8 Hour(s) | Students will solve 2 tests that will be reviewed by a learning assistant in two 2-hour sessions in the auditorium. |
Examination | 30 Hour(s) | Preparation for the final 2-hour exam. |
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.