For undergraduate curriculum in business, major in finance.
The Department of Finance offers a major in finance. Students will complete the general education requirements (including business foundation courses), business core requirements for the bachelor of science (B.S.) degree, and 21 additional credits in the major.
Finance is a broad program of study designed to provide a descriptive, behavioral, and analytical background of financial management to enable students to qualify for opportunities in financial services, insurance, brokerage, government, real estate, and financial management of business enterprises. Finance is also an excellent area for those who wish to become more knowledgeable as consumers, particularly in the fields of investments, insurance, and real estate.
Areas of study in the field of finance include corporate financial management, investments, portfolio management, insurance, real estate, banking, and risk management. Upper-level courses include a review of contemporary literature in the field, case studies, and financial problem analysis integrating finance courses previously taken.
The instructional objective of the Finance program is to provide a well-rounded professional education in finance. Such an education should provide the student with:
- a mastery of basic financial concepts and methods of analysis
- an understanding of financial operations in a global setting and of the role of financial institutions in the economy
- an ability to effectively communicate and work with others as the finance member of a team
- an ability to demonstrate leadership capabilities in financial analysis and portfolio management.
In addition to the basic business requirements, finance majors must also complete:
| FIN 310 | Corporate Finance * | 3 |
| FIN 320 | Investments | 3 |
| Select four from the following (at least two must be 400-level): | 12 | |
| Fixed Income Securities | ||
| Financial Markets and Institutions | ||
| Personal Risk Management and Insurance | ||
| Real Estate Principles | ||
| Business Financing Decisions | ||
| Financial Futures and Options | ||
| Security Analysis and Portfolio Management | ||
| Advanced Fixed Income Analysis and Portfolio Management | ||
FIN 431X | Small Business Finance Decisions | |
| Venture Capital, Private Equity, and Mergers and Acquisitions | ||
| Bank Management Decisions | ||
| Analytical Methods in Finance | ||
| Corporate Risk Management and Insurance | ||
| Real Estate Finance | ||
| Real Estate Investment | ||
| International Finance | ||
FIN 491X | International Study Course in Global Capital Markets | |
| Select one from the following: | 3 | |
| Intermediate Managerial Accounting | ||
| Intermediate Accounting I | ||
| Intermediate Accounting II | ||
or any additional 400 level FIN course. | ||
| Total Credits | 21 | |
| * | STAT 326 Introduction to Business Statistics II is highly recommended to be taken as a prerequisite |
The department also offers a finance minor for non-finance majors in the Ivy College of Business. The minor requires 15 credits from an approved list of courses, of which 9 credits must stand-alone. Students with declared majors have priority over students with declared minors in courses with space constraints.
Finance, B.S.
| Freshman | |||
|---|---|---|---|
| Fall | Credits | Spring | Credits |
| BUSAD 102 (or 103) | 1 | BUSAD 250 | 3 |
| COM S 113 | 3 | MATH 151 | 3 |
| ECON 101 | 3 | ECON 102 | 3 |
| ENGL 150 | 3 | HUM/SOC SCI | 3 |
| MATH 150 | 3 | International Perspective@ | 3 |
| LIB 160 | 1 | ||
| HUM/SOC SCI | 3 | ||
| 17 | 15 | ||
| Sophomore | |||
| Fall | Credits | Spring | Credits |
| BUSAD 203 | 1 | Core Business Course | 3 |
| ACCT 284 | 3 | SP CM 212 | 3 |
| ENGL 250 | 3 | ACCT 215 | 3 |
| STAT 226 | 3 | PHIL 230 | 3 |
| HUM/SOC SCI | 3 | STAT 326 | 3 |
| General Elective | |||
| 13 | 15 | ||
| Junior | |||
| Fall | Credits | Spring | Credits |
| Core Business Courses | 6 | Core Business Courses | 6 |
| Natural Science | 3 | Major Courses | 6 |
| ENGL 302 | 3 | U.S. Diversity or Elective# | 3 |
| Major Course | 3 | ||
| 15 | 15 | ||
| Senior | |||
| Fall | Credits | Spring | Credits |
| International/Global Perspective | 3 | MGMT 478* | 3 |
| Major Courses | 6 | Major Courses | 6 |
| Core Business Courses | 6 | General Electives | 5 |
| 15 | 14 | ||
| Total Credits: 119 | |||
| @ | Courses in these requirements may also be used as Global Perspective. |
| # | US Diversity courses may be used to satisfy HUM/SOC SCI. |
| * | All core classes must be completed prior to taking MGMT 478 in the graduating semester. |
Students must be admitted to the professional program in business to major in finance. The requirements to enter the professional program are:
1. Completion of 30 credits, Foundation Courses, ENGL 150, and all ENGL 101/99 courses if required.
2. A minimum GPA of 2.50 either cumulative or in the Foundation Courses.
Graduation Requirements:
1. Grade of “C” or higher in at least 30 credits of Core and Major courses.
2. 42 credits of 300+ level courses.
3. 50% of required Business courses must be earned at ISU.
4. At least 32 credits and the LAST 32 credits must be earned at ISU.
5. 122 Credits minimum and a Cumulative GPA of at least 2.00
6. Grade of “C” or higher in 2 of the 3 required ENGL courses.
Graduate Study
The Finance Department offers a Master of Finance (MFin) degree. The MFin is a non-thesis, non-creative component curriculum designed to provide students with in-depth coverage of finance topics and a strong quantitative skill set. Students will learn financial analysis and valuation, advanced regression techniques and programming approaches for data analysis, time series analysis and forecasting, optimization techniques, modelling of financial and risk variables, simulation techniques, and tools for effective risk management. The 30 credit program requires 18 core credits. Another 12 credits of electives are required, six of which must be in finance courses.
The department also participates in a full-time and part-time Master of Business Administration (MBA) program. The MBA is a 48-credit, non-thesis, non-creative component curriculum. Thirty of the 48 credits are core courses and the remaining 18 are graduate electives. Within the MBA program, students may develop an area of specialization in finance.
Courses
Courses primarily for undergraduates:
(3-0) Cr. 3. F.S.SS.
Prereq: FIN 301
Theory used in a firm's investment and financing decisions. Analysis of environment in which financial decisions are made; applications of analytical techniques to financial management problems.
(3-0) Cr. 3. F.S.SS.
Prereq: FIN 301
Introduction to securities and markets from the viewpoint of the individual investor. Emphasis on mechanics of trading, measurement of return and risk, behavior of security prices, valuation of stocks and bonds, mutual funds, portfolio selection techniques, and performance evaluation.
(3-0) Cr. 3.
Prereq: FIN 301
Valuation of fixed income securities, including pricing conventions, term structure of interest rates, default, duration, and hedging of interest rate risk with derivatives. Analysis of bond market sectors, including treasury, agency, corporate, sovereign, municipal, and residential mortgage bonds.
(3-0) Cr. 3. F.S.
Prereq: FIN 301
Introduction to the structure and operations of the United States financial system and its markets and institutions. Emphasis on developing an integrated understanding of markets and financial service providers including global linkages.
(3-0) Cr. 3. F.S.
Prereq: ECON 101
Risk concepts and the use of insurance by individuals and families. Emphasis on the insurance mechanism and methods of dealing with income, property, and liability risks.
(3-0) Cr. 3. SS.
Prereq: ECON 101
Legal, economic, social and financial aspects of real estate, including property rights, contracts, mortgage instruments, tax factors, brokerage, valuation, risk and return analysis, financing techniques, and investments.
(3-0) Cr. 3.
Prereq: FIN 301
In depth study of the firm's external financing decision. Emphasis on the development of cash flow statements, projected financing needs and the selection of the appropriate financing instrument. Focus on case studies and application of developed techniques on actual field project.
(3-0) Cr. 3.
Prereq: FIN 320 and STAT 326
Advanced study of pricing and using derivatives - instruments deriving value from fundamental items such as commodities, currency exchange rates, market indices, equities and bonds. Addresses basic building blocks of derivatives (i.e., forwards, futures, options and swaps) and relevant current topics and issues.
(3-0) Cr. 3. F.S.
Prereq: FIN 320, STAT 326 and permission of instructor
Advanced study of security analysis, security selection techniques and portfolio management. Emphasis on the applications of methods learned via the selection and evaluation of a portfolio of actual securities purchased in securities markets in the U.S. or abroad. Tracking and periodic reporting of the portfolio's performance relative to standard benchmarks is also required.
(Dual-listed with FIN 528). (3-0) Cr. 3.
Prereq: FIN 327, FIN 320, STAT 326
Advanced analysis of fixed income markets and securities, including valuation and trading of treasury securities, corporate bonds, mortgage backed securities. Analysis of structured financial securities, including CDO, CMBS, and ABS. Analysis of active and passive investment strategies for managing fixed income portfolios. Students are required to manage a fixed income portfolio for an institutional investor. A top-down approach to portfolio management is assumed, with active bets taken on market direction, duration, yield curve, and credit spreads.
(3-0) Cr. 3. S.
Prereq: FIN 310, FIN 320, STAT 326
An advanced investments class that focuses on alternative investments. Topics include techniques for valuing public and private firms, venture capital finance, investment banking, private equity finance, leveraged buyouts, hedge funds, the structure and financing of mergers and acquisitions, and divestitures.
Cr. 3. F.S.
Prereq: STAT 326, and ECON 301 or FIN 301
Applied empirical methods commonly employed in the analysis of firm and market data. Specific applications to financial and agricultural markets. Experiential learning experience using lectures with frequent in-class computer work sessions. Experience with financial and agricultural data sources. Application and interpretation of empirical techniques.
(3-0) Cr. 3. F.
Prereq: FIN 301 and STAT 326
Analysis of an organization's approaches to the management of price, credit, and pure risk. Emphasis on the consideration and selection of risk control and financing treatments and the decision making framework underlying the alternatives selected. Covers commercial insurance, self-insurance, and alternative financing arrangements.
(3-0) Cr. 3.
Advanced models for options and bond pricing. Geometric Brownian motion, risk-neutral pricing, no-arbitrage pricing models, exotic options, pricing options through simulation, and applications of derivatives to hedging market and credit risk exposure. Risk management tools and how they are applied within financial institutions such as banks, insurance companies, mutual funds, and hedge funds, as well as the corporate enterprise. Topics include the Basel accords, volatility modelling, value-at-risk analysis, extreme value theory, credit default swaps, and portfolio simulation.
(3-0) Cr. 3. F.S.
Prereq: FIN 301, FIN 371
Introduction to theories and methods of investment analysis applied to real estate. Studies cash flow analysis, alternative measures of investment performance, the impact of the financing decision on real estate investment risks and return, and various real estate financing techniques. Covers cases involving more complex financing and capital markets tools used in real estate.
(3-0) Cr. 3. F.S.
Prereq: FIN 310, FIN 320 or FIN 330
Advanced study of currency market equilibrium, use and analysis of currency derivatives, hedging currency risk, and additional topics, which could include multinational capital budgeting, taxation, raising capital internationally, international portfolio diversification, international capital market equilibrium, political and country risk, financing international trade, multinational corporate treasury management, and current issues.
(3-0) Cr. 1-3. F.S.SS.
Prereq: GPA 2.5; permission of internship coordinator; STAT 326; FIN 499A: FIN 330; FIN 499B: FIN 361; FIN 499C: FIN 301 plus 3 additional credits in finance; FIN 499D: FIN 320; FIN 499E: FIN 310
Supervised experience in a private sector banking, insurance, real estate, investments or corporate organization or in a governmental agency that regulates such organizations.
Offered on a satisfactory-fail basis only.
(3-0) Cr. 1-3. F.S.SS.
Prereq: GPA 2.5; permission of internship coordinator; STAT 326.
Supervised experience in a private sector banking, insurance, real estate, investments or corporate organization or in a governmental agency that regulates such organizations.
Offered on a satisfactory-fail basis only.
(3-0) Cr. 1-3. F.S.SS.
Prereq: GPA 2.5; permission of internship coordinator; FIN 301 plus 3 additional credits in finance and STAT 326;
Supervised experience in a private sector real estate organization or in a governmental agency that regulates such organizations.
Offered on a satisfactory-fail basis only.
Courses primarily for graduate students, open to qualified undergraduates:
(3-0) Cr. 3.
Prereq: Enrollment in MBA program or departmental permission.
Shareholder wealth maximization as the goal of the firm within a social responsibility context, financial Math, valuation of securities, the global financial market place as the test of value, estimation of cost of capital, global capital investment decisions, capital structure policy, working capital management.
(3-0) Cr. 3.
Prereq: FIN 501
Examines corporate financial decisions, including theory and associated empirical evidence. Topics include agency conflicts, corporate governance, executive compensation, becoming publicly traded, raising capital through public and private offerings, capital structure, financial distress and bankruptcy, leasing, dividend policy, corporate control, restructuring, and risk management.
(3-0) Cr. 3.
Prereq: FIN 501
This course focuses on case studies to develop an integrated set of financial decisions. Topic areas include fixed asset, working capital, capital structure, dividend and merger/acquisition decisions. The objective of the course is to examine different firm settings and establish a framework within which to apply financial tools.
(3-0) Cr. 3.
Prereq: FIN 501
Analysis of risk and return for individual securities and portfolios of securities. Topics include the market environment, mechanics of trading, measurement of return and risk, valuation of stocks and bonds, mutual funds, optimal asset allocation, market efficiency, portfolio performance evaluation, and risk management.
(Dual-listed with FIN 428). (3-0) Cr. 3.
Prereq: FIN 327, FIN 320, STAT 326
Advanced analysis of fixed income markets and securities, including valuation and trading of treasury securities, corporate bonds, mortgage backed securities. Analysis of structured financial securities, including CDO, CMBS, and ABS. Analysis of active and passive investment strategies for managing fixed income portfolios. Students are required to manage a fixed income portfolio for an institutional investor. A top-down approach to portfolio management is assumed, with active bets taken on market direction, duration, yield curve, and credit spreads.
(3-0) Cr. 3.
Prereq: FIN 501
Valuation of public and private firms through analysis of financial statements and other information. Study of drivers of value creation, industry analysis, patterns of growth, models for forecasting and analyzing firm cash flows, estimating and adjusting cost of capital, alternative methods of cash flow valuation, the calculation and use of valuation multiples, and valuing mergers and acquisitions.
(3-0) Cr. 3. F.
Prereq: Graduate classification
An applied course in derivative markets. Topics covered include futures and options markets, option pricing, swaps, use and rating of insurance products, and alternative forms of reinsurance. Emphasis will be placed on agricultural commodity markets, but energy, interest, currency and stock index contracts will also be covered.
(3-0) Cr. 3.
Prereq: FIN 501
Advanced investments class focusing on alternative investments. Topics include the nature and scope of investment banking, techniques for valuing public and private firms, venture capital finance, private equity finance, leveraged buyouts, hedge funds, the structure and financing of mergers and acquisitions, and divestitures.
(3-0) Cr. 3.
Prereq: FIN 501, ECON 571
Analysis, modeling, and forecasting of time series data, volatility modeling and forecasting, maximum likelihood estimation, robust standard error computation, specification testing, estimation under alternative distributional assumptions, and Monte Carlo simulation. Applications include tests of asset pricing models, analysis of asset volatility, corporate event studies, and value at risk analysis.
(3-0) Cr. 3.
Prereq: FIN 501, FIN 534
Risk management tools and how they are applied within financial institutions and the corporate enterprise. Focus on measuring exposure to stock market risk, interest rate risk, currency risk, and credit risk and how these exposures may be managed. Topics include bank risk management regulations, volatility modeling, value at risk analysis, extreme value theory, credit default swaps, and portfolio simulation.
(3-0) Cr. 3.
Prereq: FIN 501 or enrollment in MRED
Survey of techniques for assessing the value of real estate assets. Introduction to real estate financing instruments, their use and appropriateness.
(3-0) Cr. 3.
Prereq: FIN 501; enrollment in the MRED or instructor permission.
Introduction to theories and methods of investment analysis applied to real estate. Designed as second course in the sequence of real estate finance and investments. Basics of income-producing properties, the valuations of those properties using pro-forma, risk management and various other issues about the finance and investment of income-producing properties. Study of analysis of sustainable real estate development from capital budgeting perspective. Discussion of the financing practices in real estate and land development.
(3-0) Cr. 3.
Prereq: Enrollment in the MRED or instructor permission.
Mechanics, incentives and importance of securitization in firms' efforts to raise capital with application to residential and commercial real estate. Design and implementation of portfolio management strategies of private-market real estate investments. Additional topics include devising alpha strategies, approaches to diversification, creating investment plans to achieve different risk profiles and peformance measurement and analysis.
(3-0) Cr. 3.
Prereq: Enrollment in the MRED or instructor permission.
Introduction to the structure of real estate markets. Topics include determinants of supply and demand in space and capital markets, house price dynamics and causes and consequences of market cycles. Discussion of likely behavior of U.S. real estate markets and comparisons with markets in other countries.
(Cross-listed with C R P). (3-0) Cr. 3.
Prereq: Enrollment in MRED.
Refinement of students' problem-solving, communication and negotiation skills. Students work on an actual case. Teams will apply knowledge acquired in the classroom to some aspect of a current development on-the-ground and in-process project.
Cr. 1-3. Repeatable. F.S.SS.
Prereq: Permission of instructor
For students wishing to do individual research in a particular area of finance.