TIME TABLE 3RD SEMSTER FINANCE SPECIALISATION 2007
Paper (303B) Advance Financial Management
Paper (307B) Security Analysis & Portfolio Management
LECTURE PLAN FROM AUGUST TO OCTOBER
AIMS & OBJECTIVES:
Ø To blur the segmentation of Advance Financial Management (303B) and Security Analysis & Portfolio Management (307B) and apply the techniques learnt in the former to the latter.
Ø To understand the EVA methodology and the importance of looking at Returns from the Risk Perspective
Ø To examine the inadequacy of ROE & ROA in financial analysis
Ø To realize the importance & advantage of leverage; the risks associated with leverage.
Ø To understand the implications of Negative Working Capital
Ø To grasp the concept of Stand-alone risk & standard deviation, k-hat –the expected rate of return & the pay-off matrix. The coefficient of variation. Risk Aversion. Risk in portfolio context. Portfolio returns & portfolio risks. WM, MM, WY graphs & correlation. Diversifiable & market risk. The Capital Asset Pricing Model (CAPM) - Portfolio theory and the relationship between risk and return. The Concept of Beta. Why the market portfolio has a beta of 1.
Ø To revisit Capital Budgeting decisions and examine the importance of and generating ideas for capital projects under conditions of uncertainty, mutually exclusive v/s independent projects, NPV & IRR. Crossover rate & NPV profiles. Alternative valuation methods, with an emphasis on internal rate of return. Conflicts between IRR & NPV on ranking of mutually exclusive projects—scale difference & timing difference ---reconciling the IRR NPV conflict .Examine the CAPM approach to cost of equity. Adjusting cost of capital for risk. Estimating project risk.
Ø To understand The Security market line & CAPM to estimate the risk-adjusted cost of capital.
Ø To comprehend Hedging, Derivatives & Options. To examine some basic option pricing relationships. To figure out risk less portfolios using stocks & options. To study Risk management & use derivatives to reduce risk. To examine the use & misuse of derivatives.
Ø Making the link between regulation and shareholder value, accounting harmonization & the role of Accounting Standards Board the accounting regulators and capital market participants around the world.
Paper (303B) Advance Financial Management
Paper (307B) Security Analysis & Portfolio Management
LECTURE PLAN FROM AUGUST TO OCTOBER
AIMS & OBJECTIVES:
Ø To blur the segmentation of Advance Financial Management (303B) and Security Analysis & Portfolio Management (307B) and apply the techniques learnt in the former to the latter.
Ø To understand the EVA methodology and the importance of looking at Returns from the Risk Perspective
Ø To examine the inadequacy of ROE & ROA in financial analysis
Ø To realize the importance & advantage of leverage; the risks associated with leverage.
Ø To understand the implications of Negative Working Capital
Ø To grasp the concept of Stand-alone risk & standard deviation, k-hat –the expected rate of return & the pay-off matrix. The coefficient of variation. Risk Aversion. Risk in portfolio context. Portfolio returns & portfolio risks. WM, MM, WY graphs & correlation. Diversifiable & market risk. The Capital Asset Pricing Model (CAPM) - Portfolio theory and the relationship between risk and return. The Concept of Beta. Why the market portfolio has a beta of 1.
Ø To revisit Capital Budgeting decisions and examine the importance of and generating ideas for capital projects under conditions of uncertainty, mutually exclusive v/s independent projects, NPV & IRR. Crossover rate & NPV profiles. Alternative valuation methods, with an emphasis on internal rate of return. Conflicts between IRR & NPV on ranking of mutually exclusive projects—scale difference & timing difference ---reconciling the IRR NPV conflict .Examine the CAPM approach to cost of equity. Adjusting cost of capital for risk. Estimating project risk.
Ø To understand The Security market line & CAPM to estimate the risk-adjusted cost of capital.
Ø To comprehend Hedging, Derivatives & Options. To examine some basic option pricing relationships. To figure out risk less portfolios using stocks & options. To study Risk management & use derivatives to reduce risk. To examine the use & misuse of derivatives.
Ø Making the link between regulation and shareholder value, accounting harmonization & the role of Accounting Standards Board the accounting regulators and capital market participants around the world.
