BUD4 Finance 2: Financial Markets

• Topics

  The course studies how corporate managers and investors use financial markets for capital placements, pricing of securities, corporate financing, and risk management. In particular, we will discuss the functions of financial markets and institutions, how firms can raise equity and debt for their activities, how firms and investors can use derivatives for risk management, and how they include sustainability issues in financial decisions.

• Learning outcome

  Knowledge

  Upon successful completion, students will

  • understand the role of financial markets and how to use them
  • understand how to measure return and risk for stock portfolios, and why diversification reduces risk
  • understand how firms raise debt and equity capital and the choices firms face in corporate financing
  • understand risk management principles, and how derivatives (futures, forwards, options) and other instruments are used in hedging

  Skills

  Upon successful completion, students will be able to

  • apply theories and models to analyse financial markets and corporate financing decisions
  • estimate expected returns and volatility of a portfolio, and measure systematic risk, based on historical security returns
  • assess different corporate financing alternatives and risk management strategies

  General competence

  Upon successful completion, students will be able to

  • communicate knowledge and analytical insights about financial markets mechanisms to others
  • apply insights from financial markets to practical business problems
  • contribute constructively to discussions and decisions involving financial instruments markets, and corporate financing and risk management strategies

• Teaching

  The teaching consists of a combination of 1) lectures with active discussion between the students and lecturer, 2) problem-focused learning in groups, and 3) software-based (for example, Excel) assignments.

• Compulsory Activity

  There will be 1 software-based (i.e., Excel, Python, etc.) assignment covering core topics discussed throughout the course.

• Assessment

  3-hour individual digital school exam. The exam must be answered in English.

• Grading Scale

  A-F

• Literature

  Berk, DeMarzo, and Harford. Fundamentals of Corporate Finance, Global Edition.

• Permitted Support Material

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/.

• Retake

  Retake is offered early in the non-teaching semester for students who were registered for the exam at the time of the assessment in the teaching semester, and did not achieve a passing grade. Other students may retake the exam the next time the course is offered.

  For detailed information regarding the retake policy, please visit our website: https://www.nhh.no/en/for-students/examinations/retake-of-exams/https://www.nhh.no/en/for-students/examinations/retake-of-exams/ (copy url).