Curriculum

Whether we like it or not, as individuals and managers we evolve within various markets, and are subject to their rules. But how do world events shape our markets, decisions, and outcome predictions? This is the question we will address in our first theme, "Understanding Markets".

These markets are themselves part of the economy as a whole – Canadian and global. This economy goes through booms and busts over time – the business cycle – and these fluctuations have an important impact on prices, national output, unemployment, and indeed affect our daily lives. In our second theme, "Understanding the Economy", we will learn the tools necessary to understand business cycles and governments’ policy responses; and to form educated opinions about what we read on the subject in the news.

But beyond understanding markets and the economy, today’s managers face a myriad of economic issues when formulating strategies. Should we enter this market? Should we exit that one? What price should we charge? How much should we produce? Should we try and “deter” entry by a rival, or should we “accommodate”? In some markets – monopolistic markets – our ability to affect outcomes is strong. How can we use this market power to our advantage? Other markets are characterized by the fact that our actions affect, and are affected by, rivals’ actions and require a whole new set of tools – game theoretic tools. How can we use game theory to analyze these situations? These and other fundamental questions are addressed in our third theme, "Decision-Making in Market Environments".

The primary pedagogical objectives of the course are for students a) to familiarize themselves with important economic concepts, and b) to learn to use them as “tools” for efficient decision-making in business and other environments.

This course is an intensive program on financial modeling. During the course, participants will learn to create well-designed, functional and dynamic financial models. The course material includes model design, logic, construction, financial concepts, best practices and accounting treatment. Course topics include building financial statements, creating depreciation and tax schedules, forecasting and modelling working capital and capital structure, and creating discounted cash flow analysis.

This course will provide students with a brief review of the key principles of risk and return, modern portfolio theory, and market efficiency, which are critical inputs into both the corporate finance decision-making framework (through their impact on the cost of capital) and equity analysis (through their impact on the equity discount rate). Topics will include among others: risk and return; modern portfolio theory; capital market equilibrium models (including CAPM); fundamental economic, industry, and company analysis. Equity analysis will include a detailed and application-focused discussion of valuation models including the dividend discount model, free cash models and relative valuation approaches.

In addition to class assignments that will involve the analysis of real-world companies, students will also prepare a thorough analysis of an actual company to give them an opportunity to apply the concepts learned during the course to a real-life situation, and to assist in preparing them for the Toronto CFA Investment Research Challenge Competition.

MFIN 821 introduces students to the basics of corporate finance including: an overview of the financial system; a discussion of the importance of business ethics and corporate governance; a review of financial statement analysis; financial forecasting; bond and equity valuation; an introduction to risk management and portfolio theory; the Capital Asset Pricing Model (CAPM); how to determine a company’s overall cost of capital; and, a detailed discussion of capital budgeting decisions. The emphasis will be on applying the concepts to real-world situations using actual market and company data to examine company decisions and assess their future growth prospects and risks.

This course will provide students a comprehensive overview of the fixed income markets, the main debt instruments traded, types of issuers and investors, and practices in the industry. Our main focus is on the cash debt markets, with coverage of derivatives to enhance analytic tools in the subject, and on risk-management. Our goal is to bridge the gap between theory and practice by illustrating how models and theories inform best trading and risk management practices in the fixed-income space.

Course Goals:

1. Linking bond theory with practice – use of market simulations and ‘mini’ cases in class to demonstrate and apply theory to real market instruments
2. Building knowledge of current fixed income markets and issues
3. Building bond portfolios – ability to incorporate yield curve, credit, capital structure and other variables into a comprehensive approach to fixed income portfolio management
4. Understanding of bond mathematics, bond pricing and relative value of product across the credit spectrum

This course explores the theoretical and empirical evidence relevant for investing and portfolio management. We will focus on traditional assets (equity and fixed income) as well as alternative assets (e.g. commodities, real estate, private equity, venture capital) and investment style (carry, momentum, value). We will learn how to combine these assets and strategies into portfolios to achieve specific investment objectives. While the course is designed to meet the needs of students who might want to pursue a career in the investment field, the course will prove useful for personal investing as well.

This course provides a comprehensive overview of derivatives and the markets in which they are traded. We implement the manufacturing process underpinning linear as well as non-linear instruments and, in this process, uncover the key relationships employed by market participants to value them. Furthermore, we explore how derivatives are used by financial institutions, as well as by non-financial firms, to manage unwanted risk exposures and/or to enhance investment yields. The course covers plain-vanilla derivatives (e.g. futures, forwards, FRAs, swaps, and options) as well as more recent innovations, such as exotic options and credit derivatives. We also explore best practices in enterprise-wide market and credit risk management, as well as recent developments in the regulatory environment surrounding the derivatives marketplace.

This course is intended to enable students to connect and tie together the various program learnings from the MFIN program in a project course with an industry ‘client’. Students will work in teams, but also be responsible for various elements of the project as individuals, demonstrating critical thinking and problem-solving capabilities in resolving a real industry challenge. Elements of focus within the projects may include corporate development, law, technology, investments and computer science within a corporation, partnership, fund, or other for-profit business structure.

Learning will involve content delivery and hands-on experiential work as part of the project process.