Advanced Curriculum

Financial Statement Analysis and Corporate Finance I will introduce students to the basics of financial analysis and corporate finance including a detailed discussion of financial forecasting, and working capital management. The emphasis will be on using this information to examine company decisions, and assess their future growth prospects and risks.

The focus of this course is on fundamental asset pricing theory and empirical evidence that are useful for investment decisions. The course aims to provide students with in-depth knowledge of the financial markets and help them develop rigorous analytical thinking and precise mathematical derivation ability, which are essential for a sound investment decision.

This course introduces financial modelling for students. A basic understanding about accounting and financial statement analysis required for the course. This course has two main learning objectives:

• Gain knowledge of basic concepts and theories pertaining to financial modelling
• Apply obtained knowledge in financial modelling to real life cases, e.g., interpret financial statement, formulate them into standard framework, and provide comments and remarks for corporate valuation

The course will start with an introduction to financial statement analysis, and proceed with practices in financial modelling using Excel for corporate valuation and decision making. We will explain the basic concepts and theories in the lectures, and apply to relevant exercises and cases.

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, and 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”? The right answers to these questions depend on the market environment in which we are evolving. For example, in some 2 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 deep understanding of the forces that affect the valuation, risk, and return of fixed income securities and their derivatives has never been so important. As the world of fixed income securities becomes more complex, anybody who studies fixed income securities must be exposed more directly to this complexity. This course covers major topics associated with fixed income securities, their valuation, their risks, and the practice of risk management along with relevant models.

The fundamental objective of this course is to help students develop analytical skills for pricing fixed income securities and managing interest rate risk.

The course covers the valuation of a wide variety of fixed income securities and derivatives including vanilla bond, option on bond, bond with embedded options such as callable bond, American Swaption, etc. The first part of course introduces the definition and applications of fixed income securities, and the second part focuses on numeric methods and analytic tools, these methodologies include binomial trees and Monte Carlo simulations. Several widely-applied interest rate models, for example, the Ho-Lee model, Vasicek model will be taught.

This course will extend the principles of portfolio theory introduced in Equity Markets and Analysis course. Portfolio theory will be extended to cover topics including practical estimation of models; multiple factor equilibrium models; investment planning; asset allocation decisions; alternative asset classes and performance measurement. Application of these topics to both individual and institutional portfolios will be discussed. The class will take a “hands-on” approach with students having the opportunity to work with financial data, apply various estimation techniques, and evaluate portfolio performance.

This course provides an overview of common practices in the arena of alternative investment. Alternative investment can be broadly defined to embrace all investment practices that differ from investing in liquid financial instruments such as publicly traded stocks and bonds. This course will briefly discuss some recent trends in alternative investment area that include the impact investment, green finance/investment and sustainability investment. Particularly, we will discuss how capital markets and investment strategies can deliver both societal and environmental impact and generate market returns and socially optimized benefits.

Besides, this course will also invite the guested speakers who are well-established experts in financial institutions to share their insights on private equity, venture capital, green finance, distress investing, structured finance, risk management etc. Despite the various topics we covered, it is important to keep in mind that several key themes remain valid throughout the course. These themes include the illiquidity of the investment; the uncertainty of business, the importance of incentive and the trend of global development. Therefore, thinking from an economic and structural perspective is crucial in the study of the course.

This course involves a lot of students’ participation. We are going to see that there are good economic reasons that underlies the existing alternative investment process. Therefore, students are encouraged to think hard of the potential issues faced by the investors and potential resolutions, and then compare with what the industry does. In addition, students need to voluntarily FORM groups and give a presentation of case study on alternative investment in practice. This specific requirement of the presentation will be announced in class.

The aim of this course is to provide a comprehensive overview of derivative instruments and the markets in which they are traded. By the end of this course, students will be equipped with the knowledge of how to use these instruments (e.g., forwards, futures, swaps, options, and credit derivatives, etc.) in practice, how to value them, and how to manage their risks.

This course is quantitative in nature. A basic understanding of simple calculus and probability is necessary. Given the tight schedule, the students are expected to go through the assigned readings before classes and bring questions for discussion. The cases will be discussed at the end of the classes, and students are expected to offer his/her opinion regarding the cases, and actively participate in the discussions.

This course provides students with tools to value companies and understand the work and services provided by the investment banking industry. Using a number of case studies, the course provides detailed coverage on capital raising, M&A, and corporate restructuring. It will also provide students with a specialized vocabulary and important facts about the investment banking industry. The course is delivered as a mixture of lectures, case studies, and guest speakers. The objective of the cases is to use the logic of financial theory to arrive at sensible conclusions when faced with real world problems.

Technology has undeniably changed how financial markets and institutions function. Every part of the financial value chain is being “disrupted” by nimble technology-based innovators. Credit decisions are automated, the payment system is digital and investment advisors are being replaced by algorithms. Where one-on-one relationships used to determine success and failure, the ability to process and act on massive amounts of data is taking over. Securities trading and origination typically the turf of large institutions is being taken over by technology. Not only has technology impacted finance – innovations like indexing and fee-based advisors are fast changing the market for advice. Students will study both the good and bad of financial technology and innovation, regulatory aspects, and whether or not these innovations are exploiting or supporting “social welfare”. All of these aspects are changing the skills required to be successful in modern finance. Specifically, this course will provide a comprehensive introduction for “Fintech”, including new financial technology and its recent development. It mainly focuses on the following topics: Blockchain, Internet finance in China, and Economics of big data.