FNCE100 - Corporate Finance
This course provides an introduction to the theory, the methods, and the concerns of corporate finance. The concepts developed in FNCE 100 form the foundation for all elective finance courses. The main topics include: 1) the time value of money and capital budgeting techniques; 2) uncertainty and the trade-off between risk and return; 3) security market efficiency; 4) optimal capital structure, and 5) dividend policy decisions. During the fall semester there are honors sections of FNCE 100 offered. The seats in the honors sections are awarded through an application process. Please go to https://fnce.wharton.upenn.edu/programs/course-applications/ for additional information.
Prerequisites: ECON 10 or ECON 001 or ECON 002, MATH 104, ACCT 101 and STAT 101. Acct 101 and Stat 101 may be taken concurrently.
FNCE101 - Monetary Economics and the Global Economy ( Course Syllabus - 2015C)
This is an intermediate-level course in macroeconomics and the global economy, including topics in monetary and international economics. The goal is to provide a unified framework for understanding macroeconomic events and policy, which govern the global economic environment of business. The course analyzes the determinants and behavior of employment, production, demand and profits; inflation, interest rates, asset prices, and wages; exchange rates and international flows of goods and assets; including the interaction of the real economy with monetary policy and the financial system. The analysis is applied to current events, both in the US and abroad. During the spring semester there are honors sections of FNCE 101 offered. The seats in the honors sections are awarded through an application process. Please go to https://fnce.wharton.upenn.edu/programs/course-applications/ for additional information.
Prerequisites: ECON 10 or ECON 001 and ECON 002 and MATH 104. Students cannot receive credit for both FNCE 101 and ECON 102 WHARTON STUDENTS ARE REQUIRED TO TAKE FNCE101
FNCE203 - 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 100 (FNCE 611). Some are as of financial management not covered in FNCE 100 are covered in FNCE 203. 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 100 are covered more in depth and more rigorously in FNCE 203. These include investment decision making under uncertainty, cost of capital, capital structure, pricing of selected financial instruments and corporate liabilities, and dividend policy. During the Spring semester, Professor Opp does not allow students to take this course pass/fail.
Prerequisites: FNCE 100, (FNCE 611), FNCE 101, (FNCE 613) STAT 101, and STAT 102. Professor Opp and Professor Galla do not require FNCE 101 as a prerequisite
FNCE205 - Investment Management
This course studies the concepts and evidence relevant to the management of investment portfolios. Topics include diversification, asset allocation, portfolio optimization, factor models, the relation between risk and return, trading, passive (e.g., index-fund) and active (e.g., hedge-fund, long-short) strategies, mutual funds, performance evaluation, long-horizon investing and simulation. The course deals very little with individual security valuation and discretionary investing (i.e., "equity research" or "stock picking").
Prerequisites: The prequisites for Undergraduates are FNCE 100, and STAT 101-102 (STAT 102 may be taken concurrently with this course. Given that investment management requires one to analyze and deal effectively with uncertainty, a good grounding in statistics is essential, and familarity with statistics should extend through multiple regression, covariance, and correlation.
FNCE206 - 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, of 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: The following introductory Finance and Statistics courses are recommended but not required. FNCE 101 and STAT 102 are recommended and can be taken concurrently.
FNCE207 - 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: FNCE 100, (FNCE 611) ACCT 101, AND STAT 101 111 OR EQUIVALENT ACCT 101 RECOMMENDED
FNCE208 - International Corporate Finance
Analyzes financial problems corporations face that result from operating in an international environment. Major topics include managing exchange risk through hedging and financing, measuring exchange rate exposure, calculating the cost of capital for foreign operations, assessment of sovereign risks, capital budgeting from a project and parent perspective, and international taxation.
Prerequisites: A thorough knowledge of FNCE 100 (FNCE 611) is assumed.
FNCE209 - Real Estate Investment: Analysis and Financing
This course provides a broad 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 market tools used in real estate. There are case studies and two midterms, depending on instructor.
Prerequisites: FNCE 100
FNCE219 - International Financial Markets
This course focuses 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 100, (FNCE 611), FNCE 101,(FNCE 613) STAT 101.
FNCE220 - 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 100, FNCE 101.
FNCE230 - 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: FNCE 101 and ECON 001
FNCE235 - Fixed Income Securities
This course covers fixed income securities (including fixed income derivatives) and provides an introduction to the markets in which they are traded, as well as to the tools that are used to value these securities and to assess and manage their risk. Quantitative models play a key role in the valuation and risk management of these securities. As a result, although every effort will be made to introduce the various pricing models and techniques as intuitively as possible and the technical requirements are limited to basic calculus and statistics, the class is by its nature quantitative and will require a steady amount of work. In addition, some computer proficiency will be required for the assignments, although familiarity with a spreadsheet program (such as Microsoft Excel) will suffice.
Prerequisites: FNCE 100 and STAT 621
FNCE238 - Capital Markets
The objective of this course is to give you a broad understanding of the framework and evolution of U.S. capital markets, the instruments that are traded, the mechanisms that facilitate their trading and issuance, and the motivations of issuers and investors across different asset classes. The course will highlight the problems that capital market participants are seeking to solve, which you can use in your post-Wharton careers to evaluate future market innovations. We will consider design, issuance, and pricing of financial instruments, the arbitrage strategies which keep their prices in-line with one another,and the associated economic and financial stability issues. We will draw from events in the aftermath of the recent financial crisis, which illustrate financing innovations and associated risks, as well as policy responses that can change the nature of these markets.
Prerequisites: FNCE 100,(FNCE 611), FNCE 101 (FNCE 613).
FNCE239 - 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 100, FNCE 101. Recommended: FNCE 205 and FNCE 203
FNCE250 - 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, contingent-claims analysis. 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 100 (FNCE 611) and FNCE 101 (FNCE 613)- (FNCE 101-FNCE 613 may be taken concurrently)
FNCE251 - The Finance of Buyouts and Acquisitions
The course focuses on financial tools, techniques, and best practices used in buyouts (financial buyers) and acquisitions (strategic buyers). While it will touch upon various strategic, organizational, and general management issues, the main lens for studying these transactions will be a financial one. It will explore how different buyers approach the process of finding, evaluating, and analyzing opportunities in the corporate-control market; how they structure deals and how deal structure affects both value creation and value division; how they add value after transaction completion; and how they realize their ultimate objectives (such as enhanced market position or a profitable exit). The course is divided into two broad modules. The first module covers mergers and acquisitions, and the second one studies buyouts by private equity partnerships. During the spring semester this course cannot be taken pass/fail.
Prerequisites: FNCE 100 (FNCE611), FNCE 101 (FNCE 613), Co-Requisite FNCE 203 (FNCE 726) Advanced Corporate Finance or FNCE 207 (FNCE 728) Corporate Valuation.
Other Information: FORMAT: Lectures, cases, and guest speakers. Grading: Class participation, two students projects, two exams.
FNCE254 - IMPACT INVESTING
This course explores Impact Investing, a discipline that seeks to generate social benefits as well as financial returns. From tiny beginnings, the Impact Investment space has expanded and now commands significant attention from policymakers, wealthy and public-spirited individuals, academia and, not least, the world's largest asset managers and philanthropic foundations. Evangelists believe it may be the key to freeing the world from poverty. Skeptics think it will remain confined to the boutique. Regardless, Impact Investing is becoming a distinct career specialization for finance professionals despite the diverse skillset each must have and the uncertainty of the new field's growth.
Prerequisites: Prerequisites This course has no specific prerequisites, but given its wide-ranging subject matter, students will benefit from completion of any of the following Wharton courses: FNCE 101 Monetary Economics and the Global Economy; FNCE 205 Investment Management; FNCE 238 Capital Markets; and FNCE 395 Private Equity. Coursework or practical experience in microeconomics, development economics, international philanthropy, Non-Governmental Organizations, financial risk management and political risk analysis will also be useful.
FNCE256 - Finance Energy
The objective of this course is to provide students with detailed knowledge of corporate structures, valuation methods, project finance, risk management practices, corporate governance issues, and geo-political risks in the energy industry. In general, this course seeks to provide students with an overall context for understanding energy issues and risks, and how these might affect financing and investment decisions for both providers of energy and end-users of energy.
Prerequisites: FNCE 203-Advanced Corporate Finance or FNCE 207-Corporate Valuation. Students who receive permission to enroll without the prerequisites are expected to review the relevant topics as necessary to meet the requirements of the class.
FNCE383 - Strategic Equity Finance
This course combines lectures and cases, and will go through actual situations where companies need to make strategic decisions on raising equity capital. Wewill address different phases of a company's life cycle. Through these cases, from the decision-makers perspective, we will explore the different paths that can be taken and consider issues such as investor activism, governance and regulatory and valuation impact. FNCE 383 is a half semester course offered in Q3 during the spring semester.
Prerequisites: FNCE 100 - Corporate Finance
FNCE385 - ASP - FIN-TECH
The course exposes students to this fast-growing and exciting intersection between finance (Fin) and technology (Tech) while emphasizing the role data and analytics play. The course is structured around three main FinTech areas: (i) Lending/Banking services, (ii) Clearing (iii) Trading. It provides specific coverage and examples of developments from(1) peer-to-peer lending, (2) blockchain and distributed ledgers, (3) networks and their use in trading, and (4) algo trading and its use of non-standard inputs. In each of these areas, we start by analyzing the marketplace, and the incumbents, and the business case and strategies of the incoming technology-based players, while understanding the role data and analytics play in driving the technology-based services. The course is built arund a large number of examples and cases, guest lectures, student presentations, and group projects. Student are thus expected to work in teams and demonstrate a high level of independent learning and initiative.
Prerequisites: A thorough knowledge of FNCE 100 is assumed.
FNCE386 - ASP - HEDGE FUNDS
This course will cover critical aspects and characteristics of hedge funds and the hedge fund industry. It will look at the legal foundations and structures of hedge funds including the primary regulations in the U.S. and abroad that are most relevant for hedge funds. It will also present the major hedge fund strategies, describe operation, control, administration, due diligence and valuation issues. Performance evaluation and investing in hedge funds from the investor's perspective will be discussed as will be issues of potential changes in regulation, risk management, and the use of leverage.
The format of the course will mix lectures with presentations from industry participants, hedge fund managers, those who invest in hedge funds, those who advise them and provide services to them, and those who regulate them. Those who want to launch a hedge fund, join an existing one, invest in one, or provide services to one will want to register for this course.
Prerequisites: FNCE 100
FNCE391 - CORPORATE RESTRUCTURING
This course familiarizes students with financial, strategic and legal issues associated with the restructuring of financially distressed firms. The objective is to give students tools necessary to deal with the often-complex situation facing a failing firm. The participants will gain a basic understanding of the various options available for distressed firms, such as out-of-court workouts, exchange offers, prepackaged and pre-negotiated bankruptcies, distressed asset sales, 363 auctions, and Chapter 11 reorganization. We will explore the difference between economic and financial distress, and the implications for the restructuring process. Since bankruptcy provides a threat point for any distressed restructuring, the course reviews key issues of the legal framework governing bankruptcy and reorganization in the U.S. and internationally. Finally, we will consider distressed debt as an asset class and develop techniques for investing in distressed securities. The course is case based, providing ample opportunity to practice valuation of distressed companies, and hosts several guest speakers from the restructuring industry. It should be of interest for a range of careers, including private equity, investment banking, and turnaround management.
Prerequisites: The prerequisites for the course are FNCE 203/726-Advanced Corporate Finance or FNCE 207/728 Corporate Valuation. The purpose of the prerequisites is to ensure that students have a basic understanding of capital structure, and valuation methods, so that we spend more time on the nuances of distressed situations and less time on reviewing background material.
FNCE392 - Financial Engineering
Many financial products are introduced each year; some are designed to meet the needs of a particular clientele, and others are really strategies and related implementations. A common feature of the successful products is the careful attention to their design, and more importantly, the technical preparation that entered into its valuation,its hedging, and its benefits to users. Innovations in financial markets are rapidly imitated because even complex contracts and strategies that use existing securities or they are seen as equivalent to dynamically-adjusted positions in other securities. A strong foundation in the technical tools and statistical methods is invaluable in this process of financial engineering. The objectives in this course are two fold. First to provide the student with the necessary skills to design or reverse-engineer, to value, and to hedge these products. Second, to enable the student to absorb the analytical arguments in the (increasingly) technical publications that deal with innovations in these contracts - now in the in-house research notes of financial institutions and in practitioner-oriented journals - and to apply them.
Prerequisites: Students are required to either take Financial Derivatives or Fixed Income witha grade of A- or better. Students who do not satisfy this prerequisite should obtain the instructor's permission to enroll.
FNCE393 - Global Monetary and Financial Stability Policy
This course aims provide the future global manager and financial analyst the knowledge on policies set by central banks, regulators and governments to reach the goals of price and financial stability as well as support of growth and employment. The core of the course connects between the formal and actual goals that central banks follow and the related economic analysis on which the goals and the policies are set. We will explain the economic rationale for the policy prescriptions to reach the goals and how these are implemented using institutional framework in the US, the European Central Bank (ECB), Israel and remarks on other countries. We use data, current events and events of the 2007-2012 financial crisis as a basis for discussion and assignments. All these are aimed at understanding how and why the Federal Reserve of the US (the Fed), The bank of Israel (BOI) and the European Central Bank (ECB) set their policies and how that is related to academic research on these issues.
Prerequisites: FNCE100, FNCE 101 and STAT101 or STAT 102
Other Information: Requirements; Final examinations (60%-passing grade is required); three out of four assignments done by teams of 3-4 students (30%); active participation in class discussion (10%)
FNCE394 - Managing Fixed-Income Portfolios
The goal of this course is to teach you how to manage a real portfolio of Treasury, sovereign, corporate and mortgage bonds. We develop three basic models for the Treasury yield curve, corporate and sovereign credit spreads, and use these models to find value in the bond market. To implement the concepts learned in class, students form teams to manage a paper portfolio using Barclays Point, a state-of-the-art portfolio management system. Your team trades a $1 billion portfolio of bonds for which your goal will be to outperform the Barclays Aggregate Index. You trade real securities at real prices - only the money is fake. We begin by relating the term structure of interest rates to the market's view of the fundamental macroeconomic states of growth, unemployment, and inflation. To do this we need to understand a multifactor term structure model, which extends the Vasicek model you studied in the prerequisite course. Any bond other than a Treasury has an embedded option, either to default, prepay, or in some other way reduce the promised payments to bondholders. Robert Merton was the first to recognize explicitly that any corporate bond can be evaluated by calculating the value of the default option. Merton's model and its extensions are currently the state of the art models used in asset management firms for valuing bonds.
Prerequisites: FNCE 235 Fixed Income Securities
FNCE395 - 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. PLEASE NOTE: While this course is primarily intended for graduate students, admission may be granted to a limited number of interested undergraduate students. Be aware that 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 203-Advanced Corporate Finance and FNCE 251-Finance of Buyouts and Acquisitions or permission from the professor
FNCE397 - Finance In The Middle East & North Africa
This is a Wharton Global Modular Course on finance in the Middle East and North Africa. Its objective is to bring students, academics and industry experts together to study financial markets, practice, and institutions in this region.
Other Information: Course Format - This course will be taught through cases and lectures. Guest Lecturers - Distinguished practitioners will lecture and conduct case discussions. Our guest lecturers will bring their experience and insights to the classroom.
FNCE399 - Supervised Study in Finance
Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.
Prerequisites: Senior standing, 3.4 grade point average, and permission of a Finance Department standing faculty member.