Financial Mathematics II
Math 369
Spring 2005
Classes: MW: 3:00 – 4:15 Instructor: James G. Bridgeman, FSA
ARJ441 (Note the change!) MSB408
Office Hours: M 10:00 – 12:00 860-486-8382
Th 10:00 –12:00
bridgeman@math.uconn.edu
Th/F: 2:00
- 3:00 instructor's web site math.uconn.edu/~bridgeman
Or by appointment course web site
math.uconn.edu/~bridgeman/math369/index.html
Context for the Course
Required for the
Professional Master’s degree in Applied Financial Mathematics
Certified for SOA/CAS Validation by Educational Experience (VEE)
in the Corporate Finance Subject
Introduction to the Applied Mathematics of Corporate Finance
Brealey & Myers, Principles of Corporate Finance (7th ed.)
Various resources as referenced in the text
Chew, The
New Corporate Finance/where theory meets practice (3rd ed.)
Megginson, Corporate Finance Theory
Ho & Lee, The
Panjer (ed.), Financial Economics
Term Paper 10%
2 Take-home Quizzes 10%
Mini-cases 20%
Mid-term Exam 25%
Final Exam 35%
The
syllabus and grading plan are subject to change with appropriate notice to the
class.
Outline & Intended Pace
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Week of |
Topic(s) |
Chapter |
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Jan. 17 |
Financial profession – decisions about value; cash flow; valuation; Net present value principle; opportunity cost of capital |
Ch.1, 2 |
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Jan. 24 |
Financial statement analysis – where (when) is the cash? |
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Jan. 31 |
Free cash flow; equity valuation; project net present value |
Ch.4, 5 |
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Feb. 7 |
Project decisions/valuation; expected value of cash flow; variance of returns |
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Feb. 14 |
Market price of risk; capital asset pricing model |
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Feb. 21 |
Risk adjusted opportunity cost of capital; handling cash flow uncertainty |
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Feb. 28 |
Where value comes from; measuring value-creation |
Ch.11, 12 |
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Mar. 14 |
Market returns; market efficiency; mid-term exam Mar. 18 (thru Ch. 12) |
Ch.13 |
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Mar. 21 |
Sources of financing; accessing financing |
Ch.14, 15 |
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Mar. 28 |
Dividends and returns; debt leverage on returns |
Ch.16, 17 |
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Apr. 4 |
Debt effects on expected cash flows |
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Apr. 11 |
Debt-adjusted opportunity cost of capital -- WACC |
Ch.19 |
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Apr. 18 |
Option cash flows; valuation when net present value won’t work |
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Apr. 25 |
Real options and their value |
Ch.22 |
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Final Exam TBD week of May 2 - 7 |
All |
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A paper will be due on April 27. You may choose any of the main
topics (text chapters) in the syllabus and prepare a paper covering it in more depth, or presenting extensions of the material in it, after consulting outside references.
There will be two take-home quizzes assigned, the weeks of Feb. 14 and April 11. They will be designed to challenge and you may work in teams to come up with the answers. .
Students will submit the mini-cases for chapters 3, 4, 5, 6, 9, 10, 11, and 21 within a week after the completion of the chapter.
Both the syllabus and the grading plan are subject to change with appropriate advance notice
to the class.