B029871 - TOPICS IN CORPORATE FINANCE AND RISK MANAGEMENT

English

Attention: please read the prerequisites for the course, as you must satifsfy them before taking this course or adding this course into your study plan.

CONTENT:

Investor Beheavior Analysis

Portfolio Theory and Rationality hypothesis

Behavioral Fin. and Irrationality

BOOK & LEARNING MATERIAL

*FOR ATTENDANT STUDENTS (STUDENTS WILLING TO ATTEND IN REAL TIME ALL THE CLASSES OF THE COURSE), a PERSONALIZED BOOK will be used (for attending students).

Simona Zambelli (Ed, Create McGraw Hill), TOPICS IN FINANCE: INVESTMENTS AND NEUROSCIENCE

*NON ATTENDING STUDENTS MUST READ THE FOLLOWING BOOK, in ALL its part indicated below:

BODIE KANE AND MARCUS
INVESTMENTS
MC GRAW HILL
PARTS: 1-2-3-5-7 (note that the word "PART" is not equivalent of "CHAPTER", but each part includes various chapters and you must read all chapters included in the parts specified above). NON ATTENDANT STUDENTS MUST READ THE BOOK INDICATED, especially the following chapters. THE FOLLOWING CHAPTERS ARE THE NECESSARY BASE FOR THE THEORETICAL AND EMPIRICAL PARTS.

CONTENT
PART I
Introduction
1 The Investment Environment
2 Asset Classes and Financial Instruments
3 How Securities Are Traded
4 Mutual Funds and Other Investment Companies

PART II
Portfolio Theory and Practice
5 Risk, Return, and the Historical Record
6 Capital Allocation to Risky Assets
7 Optimal Risky Portfolios
8 Index Models

PART III
Equilibrium in Capital Markets
9 The Capital Asset Pricing Model
10 Arbitrage Pricing Theory and Multifactor Models of Risk and Return
11 The Efficient Market Hypothesis
12 Behavioral Finance and Technical Analysis
13 Empirical Evidence on Security Returns

PART V
Security Analysis
17 Macroeconomic and Industry Analysis
18 Equity Valuation Models
19 Financial Statement Analysis

PART VII
Applied Portfolio Management
24 Portfolio Performance Evaluation
25 International Diversification
27 The Theory of Active Portfolio Management

This is an ADVANCE course in APPLIED FINANCE, with a special focus on investor behavior, with a quantitative approach, through tests and sequential laboratory applications.

The course is in fact organized in a very INTERACTIVE, DYNAMIC, AND APPLIED WAY, with a series of sequential APPLICATIONS, TESTS, laboratories, to be completed by students during each class (both alone or in groups), with related class discussion, presentations, role playing, simulations, and business games.


As such, ACTIVE ATTENDANCE (OR ACTIVE PARTICIPATION, IN PRESENCE OR ONLINE, IN REAL TIME) IS STRONGLY RECOMMENDED FOR THIS COURSE. Real-time attendance of 90% of the course is strongly recommended for this course (starting from THE FIRST CLASS). LATE ENROLLMENTE IS NOT RECOMMENDED.

Through various applications, tests, laboratories, presentations, and class discussions, the course intends to develop advanced quantitative and qualitative analysis skills in students, as well as research independence in the "Investments" area.

THE MAXIMUM ADDED VALUE FOR THIS COURSE IS OBTAINED WITH ACTIVE PARTICIPATION, IN REAL TIME (OR IN PRESENCE OR ONLINE, IN REAL TIME ).

ATTENTION: This is an optional course of ADVANCE APPLIED FINANCE, designed ONLY for students at the 3rd year, WHO HAVE ALREADY GAINED previous knowledge in FINANCE. As such, the course is advance and applied. If you don’t have already gained a previous knowledge in finance, please consider to take another alternative optional course and do not take this course. Please include this course in your study plan only if you satisfy the pre-requisites necessary for this course.

**PREREQUISITIES (COMPULSORY) & CONDITIONS to follow the course

A) CORPORATE FINANCE (compulsory pre-condition, that will be verified; Corporate Finance MUST be taken BEFORE the course TOPICS IN CORPORATE FINANCE). As such, national and international students willing to add this course in their study plan, needs to take CORPORATE FINANCE before. Students need to satisfy the above compulsory pre-requisite and must be able to demonstrate it (upon request).

B) It is also requested to have gained a FLUENT level of ENGLISH (SPOKEN AND WRITTEN. You must be able to certify your Knowledge). In the course you will be requested to use the English language in an advance way, to partake to a number of simulations, class discussions, presentations, written projects, etc. and therefore they will need to use fluently the English language). It is your responsibility do verify you have this prerequisite before including this course into your study plan.

C) For this course, I strongly recommend students to have also gained a basic knowledge in the following subjects (typical in Economics and Management study programs):
1. FINANCIAL MATHEMATICS
2. STATISTICS
ANALYSIS
3. ACCOUNTING

D) For teaching purposes, and organizational reasons, it is REQUESTED THE ACTIVE PARTICIPATION STARTING FROM THE FIRST CLASS. I STRONGLY RECOMMEND YOU TO ENROLL IN MOODLE AS ERARLY AS POSSIBLE, BEFORE THE FIRST CLASS-- PLEASE, MAKE SURE TO ENROLL IN THE MOODLE platform dedicated to the course, AS SOON AS PPOSSIBLE, BEFORE THE COURSE STARTS, IN SUCH A WAY TO BE ABLE TO PARTAKE TO THE FIRST CLASS OF THE COURSE (very important, in order to give you all the information you need for the course, and for the various laboratories you need to do during the course, either alone or in selected groups).

As such, please get organized to partake to the FIRST CLASS OF THE COURSE (even if you will decide to not attend the course).

LATE ENROLMENT IS NOT RECOMMENDED, and nor advisable, given the applied nature of the course!!! Organize yourself to partake to the 1 CLASS OF THE COURSE, in which I will give you all the details necessary to follow the course material, and to pass the exam. Even if you will not be able to attend the course later, you need to ATTEND the FIRST CLASS anyway, in order to get all the information you need to know to properly take the course and pass the exam. As such, please get organized and organize yourself to attend the first class of the course.

If you enroll later in the course (i.e., after 2 weeks), you must take the exam as NON ATTENDANT STUDENT (see below the specific instructions for non attendant students)

(*) Note: If the pandemic situation will continue, the attendance can be done on-line, but you must attend in real time,in order to partake to all the applications and discussions organized in each class.

THE COURSE IS ORGANIZED IN A VERY APPLIED AND ADVANCE WAY, WITH A SERIES OF SEQUENTIAL APPLICATIONS, CLASS DISCUSSIONS, AND LABORATORIES.

AS SUCH, THE ATTENDANCE (IN REAL TIME, either in presence of ONLINE) IS STRICTLY RECOMMEDED.

No passive partecipation is recommended, nor advisable, given all the applications, laboratories, discussions, and exercises organized during the course. Each application organized in previous classes is necessary to be able to solve the applications and case discussions organized in the further classes. This is why the attendance (in real time) in vital for this course. The attendance may be only online (if the pandemic situation will require online classes). The online attendance must be IN REAL TIME in order to interact with the other students present in class(to be able to partake to all laboratories and discussions organized in the course).

HIGHLY RECOMMENDED AN ACTIVE PARTICIPATION IN REAL TIME STARTING FROM THE FIRST CLASS (the active participation can be in presence, or online, according to the pandemic situation). NO PASSIVE PARTICIPATION is recommended. NO LATE ENROLLMENT is recommeded. Please make sure to have all the PRE-REQUISITES specified for this course, before taking this course.

EXAM EVALUATION


*For ATTENDANT STUDENTS: TESTS AND SEQUENTIAL LABORATORIES, CASE DISCUSSIONS, BUSINESS GAMES, ORAL PRESNTATIONS AND WRITTEN FINAL PROJECT (on the topics discussed with the professor, and on the results of the Trading Contest, organized in class). See below some basic guidance

* NON ATTENDANT STUDENTS: written final project on the results of a trading simulation that non-attendant students must organized themselves). (see the book for non attendant students to gain the necessary theoretical knowledge; see also the Section "Extended Program" to view the the specific instructions to complete the project work, for non attendant students)

* The project must be sent via email to simona.zambelli@unifi.it, indicating the following information (in the subject line): TOPICS FINANCE, SURNAME NAME XX.

* Attending students must also indicate the Group number, such as:

TOPICS FINANCE, G XX, SURNAME NAME XX.

* The project must be sent AT THE SPECIFIC DATES indicated for the exam

* Students (attending and not attending) will be assessed according to the following categories:

1) Deepness of the Analysis of the theoretical and empirical parts (from 1-10)
2) Synthesis capacity (Clarity of explanation, written style/format, the precision of sources) (from 1-10)
3)Personal and Innovative contribution added into the project, with respect to the instructions/guidance received, book chapters and literature (from 1-10)

* For the format and the written style, it is recommended to follow in detail the format and style of the Journal of articles published in the Journal of Banking and Finance. It is recommended to pay attention to details (including references).

* Projects with copied parts or with similar parts to other papers (without source) will be automatically annulled and the project work will have to be completely redone

COURSE PROGRAM
EXTENDED PROGRAM & EXECUTIVE SUMMARY

This is an advance (OPTIONAL) course in applied finance, with a special focus on investor behavior, with a quantitative approach.

ATTENTION: The course is organized with a series of APPLICATIONS, EXERCISES, AND SEQUENTIAL GROUP LABORATORIES.

Any students willing to add this course MUST verify the pre-requisites for the course (written above), before deciding to add this course in your study plan.

Given the applied and advance nature of this course, students are required to ACTIVELY PARTECIAPTE (no passive participation). Students are required to read the theoretical material before class and to discuss the theoretical material in each laboratory organized in class. Students will be involved in various applications and games, within the various laboratories organized. As such, The REGULAR ATTENDANCE IN REAL TIME IS STRICTLY RECOMMENDED. PASSIVE PARTICIPATION, FOR THIS TYPE OF COURSE, IS NOT RECOMMENDED.

ATTENTION: This is an optional course. Please include this course in your study plan only AFTER THE COMPLETION OF CORPORATE FINANCE COURSE (COMPULSORY!).

It is also useful to have gained a basic knowledge in the following courses:
1. FINANCIAL MATHEMATICS
2. STATISTICS
3. ACCOUNTING

PLEASE, MAKE SURE TO ENROLL IN THE COURSE BEFORE THE COURSE STARTS (for organizational reasons --LATE ENROLMENT IS ABSOLUTELY NOT RECOMMENDED, nor advisable).

PLEASE GET ORGANIZED TO ATTEND THE FIRST CLASS OF THE COURSE, EVEN IF YOU WILL DECIDE TO NOT ATTEND THE COURSE.

* ATTENDING STUDENTS MUST ACTIVELY PARTAKE TO ALL THE CLASSES (AND LABORATORIES ORGANIZED IN THE COURSE). Attending students must read the theoretical material BEFORE class, and in class must actively partake to the various applications organized, as well as class discussions, presentations, laboratories and group projects organized during the course.


* Attending and non attending students will be evaluated with a final project work (to be sent to simona.zambelli@unifi.it, at the specific dates set for the exam, which consists of a Theoretical Part and an Empirical Part.

The Theoretical Part, must be related to a deep analysis on investment behavior (according to the theoretical explanations indicated in the book, expanded with the related scientific literature on a specific focus you decide to implement. This scientific literature can be driven from www.scopus.com, and www.ssrn.com. Please pay particular attention to the articles written in the Journal of Banking and Finance.
Your theoretical part must follow the theoretical style and format of the articles included in Journal of Banking and Finance).
Do not copy and paste.

If you copy some parts, without proper source, and without putting the copied part into "...", your thesis will be automatically rejected. You must be able to elaborate and critically discuss the theory.

The empirical part, instead, is related to a simulation of trading of 3 weeks (you have to imagine to buy 15 companies, quoted in the stock market; you have to properly evaluate them in the moment of acquisition; you have to follow their price trends for 3 weeks). At the end of the 3 weeks, you must comment the performance of your portfolio, formed of 15 companies, critically discussing the market trends observed during the 3 weeks of simulation, and writing 15 Investment reports (of 3-4 pages, for each companies acquired).

*Attendant students will have the unique opportunity to partake to trading games organized in the course (groups will be set at the first class of the course).

* NON ATTENDING STUDENTS MUST IMPLEMENT A WRITTE PROJECT, WHOSE EMPIRICAL PART MUST BE RELATED TO A PORTFOLIO OF 15 COMPANIES, PROPERLY ANALYZED AND FOLLOWED FOR 3 WEEKS (ACCORDING TO THE CRITERIA DISUSSED IN THE BOOK –IN THE VARIOUS CHAPTERS, INDICATED ABOVE)


* PROGRAM

Introduction: The Investment Environment; Asset Classes and Financial Instruments; How Securities Are Traded; Investment Companies

Security Analysis and Valuation: Macroeconomic and Industry Analysis; Equity Valuation Models; Fundamental Analysis, and Financial Statement Analysis

Rationality and Portfolio Analysis: Theory and Practice:
Risk, Return, and the Historical Record; Capital Allocation to Risky Assets; Optimal Risky Portfolios; Equilibrium in Capital Markets: Theory and Practice: The Capital Asset Pricing Model; Multifactor Models of Risk and Return; Empirical Evidence on Security Returns

Applied Portfolio Management: Portfolio Performance Evaluation; International Diversification; The Theory of Active Portfolio Management


Irrationality & Modern Behavioral Finance

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