Policies

All of the default policies for Stern courses apply to this course. Exceptions: As long as they are quiet and non-distracting, laptops and similar devices may be used for purposes of note-taking. Laptops and similiar devices (with the exception of financial caculators) may not be used for in-class exams.

What's the course about?

This course is about financial markets: financial assets (securities) and how they are valued and traded. Financial markets constitute the financial environment in which the firm operates. Although much of what we cover is relevant to personal finance and corporate finance (that is, financial decisions within the firm), these areas are not the primary focus of the course. For the most part, we take the viewpoint of a user of the financial market: an investor, investment advisor, or someone using the market to hedge (reduce) risk.

Prerequisites

The prerequisites for this course are introductory courses in accounting, statistics and economics. Finance is very mathematical and you will need to utilize material developed in the prerequisite courses. If you have not taken these courses, you may have great difficulty in this one. Among the prerequisites, the most important is statistics. If it's been a while and/or you'd like to brush up, spend some time with the statistics primer.

Over-qualifications

If you were an undergrad finance major, or if you've had similar exposure to the material, you should probably be skipping this course. In the first place, you will be thoroughly bored. Secondly, it is a misallocation of your time and money. Thirdly, a prospective employer is likely to discount a high grade.

Requirements

On-line quizzes. At the conclusion of each topic, I'll be posting a short on-line quiz. I intend these to test for basic competence with the material. I hope that they will help structure the time you allocate to the course, and keep you from slipping behind.

Exams. There will be an in-class midterm and a final exam. The format is multiple choice. The exams are closed book, but you can (and should) bring a sheet of notes and a calculator. See details below.

Recommended problems

I'll often be assigning recommended problems from the book. I choose problems that I think are "useful", in the sense of helping you understand the material and prepare for exams. These are recommended only; they aren't for turning in; you should feel free to work on them in groups.

Exams

There will be midterm (in-class) and final exams, covering material from the class sessions and the reading assignments. The format is multiple choice.

The exams are closed-book, but you can bring in one 8 1/2 " x 11" page of notes (covered both sides in the smallest typeface you can read). You can also (in fact, you should) bring in a financial calculator. As long as it is truly a financial calculator. See the calculator links below. Nothing that has a full QWERTY keyboard is acceptable for the exams. If you intend to use anything other than an HP-10b, 10bII, 17b, 12c, or a TI Business Analyst, please clear it with me at least one business day prior to the exam.

Grading

Your final grade in the course will be 35% Midterm, 50% Final and 15% online quizzes. (I'll compute a numerical weighted average and then convert this to a letter grade.) These weights are tentative.

On the midterm and final, I'll compute a curved score that will approximately adjust for any differences in difficulty between the two. It is the curved scores that will go into the final average.

When I hand back the midterms, I'll also provide a corresponding letter grade (like "A grade of 88 is roughly a B+".) The correspondence is approximate: it is the numerical grade that goes into the final average - not the letter grade.

Final letter grades will be determined in accordance with the Official Finance Department grading standards: Grade Distributions for core graduate finance course (B01.2311): A 10%; A- 10 to 15%; B+ 10%; B and B- 50 to 60%; C+, C, C-, D and F 10 to 15%; IP and IF No more than 5%

Accommodations

If you have a qualified disability and will require academic accommodation during this course, please contact the Moses Center for Students with Disabilities (CSD, 998-4980) and provide me with a letter from them verifying your registration and outlining the accommodations they recommend. If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.

Class sessions

The classes are lecture format. The content overlaps with the book. Sometimes I’ll be trying to reinforce the intuition behind a principle; sometimes I’ll be trying to extend the principle beyond the book’s coverage; sometimes I’ll be applying the material to a current problem. And, in these times, I’ll be pointing out where the text has been overtaken by events. I often break off from lecturing and ask you to work in-class problems.

I encourage you to ask questions in class. They help me pace the class and get a sense of what is and isn’t coming across. One thing, though. Sometimes people will ask questions that are sharp, relevant and important, but also happen to be two miles beyond where I think the class should be (see “over-qualifications,” above).  Don't let yourself fall under the illusion that the such questions reflect the average level of your classmates.

I'll usually hand out copies of the slides at the start of class. In the course of the class, the slides will get marked up. Within a day or so after the class, I'll post the marked-up slides to the web.

Streaming videos are generally available about 24hrs after the class. These videos are provided on a "best efforts" basis. There are no guarantees that they videos will be available or usable.

Texts, etc.

The shrink-wrapped package in the bookstore consists of:

• Bodie, Kane and Marcus (BKM), Investments, 8th edition. (Note: Some sections of this course use "Essentials of Investments". We are using "Investments".)
• Problem solutions to BKM.
• Chapters 4, 5, and 8 from Ross, Westerfield and Jordan (RWJ), Essentials of Corporate Finance, 6th edition. Also see the books link.

Calculator

A financial calculator is necessary to do the problems and quizzes. In addition to the usual arithmetic operations, a financial calculator can compute exponentials, log functions, and present and future values of simple sums and annuities. An ability to compute internal rates of return is sometimes useful, but is not required. The calculator most suitable for the course is the Hewlett-Packard 10B. When I go through a calculation key-by-key, I'll be using HP-10B keystrokes. Also see Calculator links.

Calculator manuals are generally complete but overly-detailed for many purposes. Here are some links to summary material:

• Using a financial calculator (Prof. Pamela Peterson Drake, James Madison University)
• Using your calculator for financial decisions (Dr. Michael Kinsman, Pepperdine University)

Cheating

In my teaching career, I've encountered a handful of incidents involving students sharing information during in-class exams or changing answers on exam papers that have already been graded.

With respect to cheating, the standards of the faculty and your fellow students are very clear. If evidence of cheating comes to my attention by any means, I will prosecute to the extent permitted under faculty guidelines.