FIN - Finance

FIN2000 Finance

4 Intermediate Management Credits
 

FIN 2000 Principles of Finance helps students understand the role of Finance in the management of business ventures and in their daily lives. Effective financial management, whether performed by the general manager in a small business, or by the finance organization in a large corporation, is necessary for ventures to succeed and grow. A successful financial manager must have skills, tools, and perspectives in many areas, including valuation of stocks and bonds, capital budgeting, investment risk and return, the cost of investor-supplied capital, and capital structure. A successful financial manager also must appreciate the key characteristics of a venture – including its products, services, market position, and purpose – and the economic and social environment in which the venture operates. Accordingly, this course links financial analysis and decision-making to critical contextual factors, allowing students to understand the part played by Finance in the overall impact of ventures. Throughout the topic coverage, connections between managerial Finance and personal Finance are recognized and explored, facilitating development of essential financial literacy capabilities.  Competency will be developed through readings, lectures, class discussions, and exercises.

Prerequisites: ACC1000 AND AQM1000

FIN2520 Personal Finance
4 General Credits

This course teaches students to negotiate the retail financial landscape, emphasizing issues that have a large impact on their future financial well-being. It assumes no financial knowledge other than first-year finance. The course covers topics such as understanding and appreciating the time value of money, the financial planning process, financing the purchase of a house and other consumer loans, saving for retirement and other goals, selecting a financial advisor, taxes, estate planning, behavioral finance and common investment scams. Specific investment products studied include mutual funds, exchange-traded funds, municipal bonds, alternative investments (including hedge funds, private equity funds, and commodities), annuities, and insurance products. Consideration will be given to the problem of an entrepreneur or start-up employee who has a substantial fraction of personal wealth invested in a single business venture, including evaluating stock-and option-based compensation plans. Over the duration of the course, students will work to develop a personal financial plan.

Prerequisites: SME2021

FIN3502 FinTech
4 Advanced Management Credits 

The financial services industry is changing rapidly with the emergence of financial technology (FinTech). This course is designed to introduce key financial technology and its applications in financial services. Students will develop a broad and solid understanding of the recent innovations in FinTech, and their benefits and limitations. Students will also have hands-on problem-solving experiences that are useful in the FinTech venture. Ultimately, this course aims to help students identify entrepreneurial opportunities in FinTech and equip them with relevant knowledge and skills. The course will use a mixture of lectures, hands-on programming, case studies, guest speakers, and group projects. This course emphasizes and builds on Entrepreneurial Thought & Action, and Diversity, Equity, and Inclusion in the context of the financial services industry.

Learning objectives for this course: 
• Understand key financial technology, including artificial intelligence (AI) & machine learning (ML) & natural language processing (NPL), blockchain & cryptocurrency, smart contract & ethereum. Develop relevant programing skills.
• Explore recent innovations in the financial services industry, including payment, credit, capital markets, insurance, SMB, and real estate. 
• Assess the value creation of FinTech. Analyze the limitations and challenges of FinTech (e.g., inclusion, regulation)
• Identify entrepreneurial opportunities in the FinTech space. Propose a FinTech startup idea and develop a business plan. 

Evaluation of undergraduate program learning goals:
• Collaboration: Students will work in teams to prepare for the final project report and presentation.
• Communication: The course will be highly interactive. Students need to actively participate in case studies and guest lectures. The final project will require students to pitch a startup idea both through a written report and a presentation. The quality of the written project and oral presentation will be used as a key evaluation criterion. 
• Problem-Solving: Students will develop problem-solving skills through hands-on programming and assignments, case studies, and final projects. Students will be able to apply knowledge and skills learned from this course to identify real opportunities and challenges in the FinTech industry, propose new startup ideas, and develop business plans. 

Prerequisites: SME2021 

FIN3511 Residential Real Estate
4 General Elective Credits

This course is designed to introduce students to the residential real estate housing market in the U.S. and equip them with the knowledge to efficiently and effectively navigate that marketplace. Through a practical application of the course topics and examination of current industry examples, we will explore the process of buying, selling, financing and leasing residential real estate, with a focus on single-family homes, condominiums, townhomes, duplexes, triplexes and multi-family apartments of four units or less. We will examine the major issues and considerations that impact the valuation, financing, acquisition, disposition, and leasing of residential real estate.

Prerequisites: FME1001

FIN3512 Real Estate Transactions and Law

4 General Elective Credits

Real-estate is a transaction-based business. To successfully execute any business strategy in real estate, it is essential to understand the relevant legal structures and transaction documentation. This introductory and practical course will provide students with an understanding of the fundamentals of commercial real estate transactions from a legal and managerial perspective. The course is designed to familiarize students with the various “life stages” of commercial real estate transactions: negotiating the term sheet, conducting “due diligence” property investigations, structuring ownership interests, financing the project, closing and acquiring title, developing the property, managing and leasing the project, and ultimately, selling the asset or ownership interests. By integrating business strategy and legal structure throughout the course, students will explore how legal considerations impact decision-making in valuing real estate assets, selecting effective ownership structure and control, managing financial risk, allocating financial returns, and developing exit strategies for real estate investments.

Prerequisites: SME2021 or FIN2000

FIN3515 Corporate Financial Management
4 General Elective Credits

This course is designed for students interested in corporate financial management. Its principal goals are to provide the concepts and techniques required to make long-term investment and financing decisions within the firm. At the end of the course, students will be able to make real asset investment decisions by valuing a proposed investment project or acquisition. Students will also be able to qualitatively and quantitatively assess the appropriateness of a firm's financing policy. Topics covered include alternative valuation methods, estimating cost of capital, real options, capital structure, and corporate payout policy.

Prerequisites: SME2021 or FIN

Recommended: ACC3502

FIN3520 Security Valuation
4 General Elective Credits

This course is designed for students interested in investment banking, fixed-income valuation or equity analysis. Students develop tools and techniques for the valuation of different securities. Topics covered include: bond pricing, bond duration, the term-structure of interest rates, financial statement analysis, equity valuation models, and firm valuation. A major focus of this class is the valuation of specific firms and securities using finance theory and applications.

Prerequisites: SME2021 or FIN2000

Recommended: ACC3502

FIN3535 Financing and Valuing Sustainability
4 General Credits

This course will examine the intersection of sustainability, corporate social responsibility and socially responsible investing with the traditional theories and tools of finance. Students will learn to describe the sustainability landscape and then analyze sustainable technologies, strategies, and business models from the perspective of managers, entrepreneurs, and investors. Basic financial tools such as discounted cash flow, capital budgeting, capital structure, and risk/return will be used to evaluate the feasibility and financial implications of sustainable products and practices in a variety of industries and applications. Students will learn how to balance the needs of all stakeholders in organizations to create both financial and social value.

Prerequisites: SME2021 Finance

FIN3555 Real Estate Investment
4 General Elective Credits

This course is designed for students interested in learning to evaluate real estate investment opportunities. The focus is on commercial property, not single-family homes, and on U.S. real estate. Using readings and case studies, students examine real estate as an asset class and explore its similarities and differences from other investment types. The foundation for this course involves understanding the industry terminology, legal rights and restrictions, and basic techniques for financial projections and analysis.

Expanding from this base, students explore the use of debt and the implications of taxes on real estate investment returns.

Prerequisites: SME2021

FIN3560 Financial Markets and Instruments

4 General Elective Credits

This course provides students with an understanding of many important financial instruments and the financial markets in which they trade. The topics covered include the major financial markets and their associated structures, quantitative techniques for valuing various financial securities and their cash flow streams, and factors affecting interest rates. This course also provides an introduction to derivatives and risk management. Topics include: instruments/markets, bond markets, equity markets, security firms and investment banks,  issuing securities, organized exchanges, bond and stock valuation, interest rate determination (term structure), bond duration, foreign exchange, mortgages, risk management, an introduction to derivatives (including options, futures, and swaps), pay off profiles and an introduction to Black-Scholes.

Prerequisites: SME2021 or FIN2000

FIN3565 Real Estate Development
4 General Credits

This course reviews the process by which value is created through real property improvement and modification. The course examines that real estate development process, exposing students to the critical steps and key decisions required to create, secure approvals, construct, lease, finance, and manage property improvements. Through case studies, related readings, and a final team project, students examine the perceived risks and potential returns of real estate development.

Prerequisites: FIN3555

FIN3504 Private Equity

4 Advanced Management Credits

This course will provide students with the opportunity to develop a practical understanding of the private equity industry and related topics generally in the venture capital industry. The course will focus on various phases of activity including fund organization, prospecting, valuation, LBO modeling, negotiating skills and exits. The course will also provide students with an understanding of careers in private equity and related industries. The course is designed to enable students to practically apply financial theory in a way that is consistent with industry practices, techniques and professional expectations. As such, the class will utilize case studies involving real companies and will have a heavy emphasis on the practical financial research skills relevant to private equity, and how industry-specific issues are addressed by private equity professionals.

Prerequisites: Any FIN3000 level course

FIN4505 Financial Trading Strategies and Risk Management
4 General Credits

In this course, students learn to develop and implement institutional (firm-level) financial trading strategies. These strategies are guided by quantitative models that identify, quantify, and manage risks and expected return. In so doing, students learn how to make decisions in an uncertain environment. The course is based on an experiential learning approach, in which trading simulation software provides a platform for delivering learning-by-doing cases. Specific cases covered in the course include: agency trading; principal (liability) trading; algorithmic market making; managing risk capital with value-at-risk; transportation, storage, and production arbitrage in commodity futures markets; and agricultural hedging. The course also covers fundamental concepts in market microstructure, such as bid-ask spreads, price discovery, information asymmetry, liquidity, and inventory risk.

Prerequisites: SME2021 or FIN2000

FIN4507 Risk Management
4 Advanced Management Credits 

Risk management has risen to a new pre-eminence with firms being exposed to an ever increasing range of risks. The reasons for this rise, and the techniques and instruments used by risk managers, are the subjects of this course. The course will first cover the concept of Enterprise Risk Management (ERM) and then analyze the key financial tools used in risk management, such as futures and options. Students will then use their knowledge to manage risk optimally and alter the risk/return characteristics of corporations. The course will apply these tools to risk management cases to cover a whole set of different sectors (airlines, automobiles, IT, etc.). The course will also go into some of the most pressing risks of our time, namely: climate change; diversity, equity and inclusion (DE&I); and cybersecurity, as well as risks related to Mergers & Acquisitions (M&A) and executive compensation.

Prerequisites: SME2021

FIN4510 Corporate Finance Modeling and Decision Tools
4 General Credits

This course is designed to provide a practical application of corporate finance skills to a variety of analyses commonly performed by investment bank and commercial bank financial analysts. Mergers and acquisitions, initial public offerings, private equity placements, senior and mezzanine debt issuances, leveraged buyouts, and other common financial transactions will be covered. We will explore the process of each transaction and place heavy emphasis on the role of the financial analyst in analyzing each situation. Students will gather source data and build and apply models typically used in practice by investment banks, commercial banks, and corporate finance consultants. The course is designed for those interested in careers in investment banking, commercial banking, corporate finance consulting, and strategic planning.

Prerequisites: SME2021 or FIN2000

FIN4521 Babson College Fund I
4 General Elective Credits

The Babson College Fund is a two-semester course, where selected students manage a portion of the Babson College endowment. The Babson College Fund Office selects undergraduate and graduate students to be analysts and portfolio managers.

By learning the basics of security analysis and portfolio management, it is hoped that students will be prepared to take jobs in the Investment Management and Investment Banking industries post-graduation.

The Program Director and Executives in Residence are committed to helping this pursuit as much as possible. The course also requires that students refine their networking skills and develop a proficiency in the analytical tools available through the Cutler Center to maximize their employment prospects.

Prerequisites: Program Director (Patrick Gregory) Permission

FIN4521 Babson College Fund II
4 General Elective Credits

The Babson College Fund is a two-semester course, where selected students manage a portion of the Babson College endowment. The Babson College Fund Office selects undergraduate and graduate students to be analysts and portfolio managers.

By learning the basics of security analysis and portfolio management, it is hoped that students will be prepared to take jobs in the Investment Management and Investment Banking industries post-graduation.

The Program Director and Executives in Residence are committed to helping this pursuit as much as possible. The course also requires that students refine their networking skills and develop a proficiency in the analytical tools available through the Cutler Center to maximize their employment prospects.

Prerequisites: Program Director (Patrick Gregory) Permission

FIN4530 Investments
4 General Credits

This course is designed for students interested in investment or portfolio management. Students explore the simultaneous management of multiple securities, using statistical and other mathematical tools. Topics covered include: risk and return, allocation of risky assets, setting portfolio objectives and strategy, portfolio optimization, risk crafting, and portfolio performance evaluation. Through case studies, investment tools, projects, and readings, students will explore investment and portfolio theory and practice.

Prerequisites: SME2021 or FIN2000

FIN4535 Fixed Income and Structured Products

4 General Credits

This advanced quantitative course is designed for students interested in the sales and trading of fixed income securities and their related structured products, as well as students interested in fixed income portfolio management. Topics covered include: (i) bond pricing and day count conventions; (ii) relative value and yield curve construction; (iii) duration and convexity; (iv) pricing and hedging of interest rate swaps; (v) Treasury bond futures, conversion factors, and the concepts of cheapest-to-deliver and implied repo; (vi) the repo (GC and special) market; (vii) credit risk and the pricing of high yield bonds and credit default swaps; and (viii) securitization, mortgage-backed securities, and collateralized mortgage obligations. Course enrollment will be limited to enable extensive in-class usage of Bloomberg and other Cutler Center resources.

Prerequisites: SME2021

FIN4540 Corporate Financial Strategy
4 General Elective Credits

With the quickening rate of technological, demographic, institutional, and political change and globalization, managers, consultants, and investment bankers face increasingly turbulent and complex business environments. This course investigates the use of financial instruments and strategies to achieve a sustainable competitive advantage and create value. The course explores the relationships among corporate strategy, corporate finance, and financial innovation, and should be of interest to managers who aspire to use financial strategy and tools to support their strategic choices and to those who will be advising corporations on how to achieve their financial goals.

Prerequisites: SME2021

Recommended: ACC3502

FIN4545 Alternative Investments

4 Advanced Management Credits

This course provides an overview of alternative investments along with several non-traditional investment strategies. It is intended not only for finance and investment professionals, but also for those with an entrepreneurial and disruptor spirit. The course begins with a brief review of traditional investments of publicly traded stocks and bonds along with their limitations and imperfections. Students will then consider alternative investment vehicles such as private equity, venture capital, commodities, income producing real properties, licensing and royalty rights, cryptocurrencies, and social impact investing. We will also consider the move toward ESG investments (environment, social and governance) and their emphasized role in the alternative sphere. Students will analyze case studies involving The Endowment Model for Investing, Fund of Funds, Peer-to-Peer Lending, and Social Impact Investing, culminating in a team based capstone project. The course materials will challenge students to recognize investment anomalies that the marketplace has not recognized. The course will also provide an overview of the material for the Chartered Alternative Investment Analyst Program (CAIA) professional certification. Students will develop a robust knowledge base for careers in portfolio management, investment product development, compliance, consulting, and risk management.

Prerequisites: SME 2021 or FIN2000

FIN4560 Options and Futures
4 General Credits

This course is an introduction to options, futures, and other derivative securities. We examine the nature of the instruments, the theory of how they are priced, and strategies in which they are used. Cases address applications in both investment management and corporate finance, covering such topics as risk management, financial engineering, speculation, and arbitrage.

Prerequisites: SME2021 or FIN2000
Recommended: ACC3502

FIN4570 Global Financial Management
4 General Elective Credits

The central theme of this course is how to manage the finances of a multinational firm. It devotes attention to managing the short-term finances of a multinational, including topics like centralizing cash management, netting, and transfer pricing. It then deals with long-term financial management of the multinational. That section includes capital budgeting in the multinational context, capital structure decisions, and also studies how a multinational can sometimes have a lower cost of capital than a single-country firm of the same size. The third major theme is how the multinational can optimize its relationship with the capital markets, including the national stock markets where its subsidiaries operate. This section includes a discussion of the opportunities created for multinational companies by international portfolio investment. If time permits, there will be a section on how to operate in countries with inconvertible or hyperinflationary currencies. The course deals with the international financial environment, meaning topics such as exchange rates, balance of payments, and cross-border capital flows, only to the extent necessary to put the financial decisions for firms operating in more than one currency into proper context.

Prerequisites: SME2021

FIN4571 Real Estate Finance and Advanced Modeling

4 Advanced Management Credits

This course will address the practical and theoretical issues involved in estimating cash flows and values of a wide variety real property, financial interests, investment interests and deal structures using discounted cash flow (DCF) techniques and sensitivity analyses. Students will solve real estate cash flow and DCF problems using models for property, portfolio, debt and equity interests for a variety of commercial real estate property types. Students will learn and apply the detailed modeling applications necessary to estimate both cash flows and values in the world of real estate finance and capital markets. Students will use and learn both Excel and industry standard ARGUS software applications in the process of modeling lease by lease cash flows at the property level, portfolio cash flow consolidations, related debt structures, including first mortgage and mezzanine debt, and equity waterfall structures. ARGUS is a widely accepted unique and complex modeling software that is very frequently required by employers in real estate finance. This course includes explanations of the theoretical issues and concepts involved in these practical applications. This course is intended for students who have an interest in real estate or who desire to expand their knowledge of finance to include real estate.

Prerequisites: SME2021

SME2021 Finance
3 Intermediate Management Credits

SME finance is designed to develop student understanding of the role of finance in the management of a business venture. Effective financial management, whether performed by the general manager in a small business, or by the finance organization in a large corporation, is necessary if a venture is to succeed and grow. A successful financial manager must have skills, abilities, tools, and a theoretical understanding in many areas, including valuation, financial forecasting, capital budgeting, investor expectations regarding risk and return, the cost of investor supplied capital, and financial strategy. Student skills will be developed in all of these areas in the SME finance stream through readings, lectures, class discussions, exercises, and an analytical project. A successful financial manager must also understand the venture’s economic environment, its products, services, and market position, its operational capabilities, and its organizational behavior characteristics. The SME finance stream will link financial management analysis and decisions to these other critical functional areas, so the student will understand its part in achieving overall success for the venture.

Prerequisites: ACC1000 and QTM1000