Course Catalog

The Course Catalog includes course descriptions of all courses offered by the Undergraduate School at Babson College. For descriptions of the courses offered in the current or upcoming semesters, please see the Course Listing.

 Undergraduate Course Catalog

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FIN2520 Personal Finance 4 credit - general credit 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. Prereqjuisite: 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


FIN3515 Corporate Financial Management (General Elective) 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. Recommended: ACC3502 Prerequisite: SME2021


FIN3520 Security Valuation (General Elective) 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. Recommended: ACC3502 Prerequisite: SME2021


FIN3522 Behavioral Finance: Efficient Markets Meet Human Behavior 2 credit (general credit) For many decades, finance theory and practice has relied on two ideas: individuals are rational and markets are efficient, in spite of events and actions that did not seem rational or efficient. In this course we will examine how individuals and firms make financial decisions, and how those decisions may deviate from those predicted by traditional financial theory. We will explore psychological biases in financial decision making, and examine the impacts these biases have on financial markets and financial decision making. In addition, we will examine how the insights from behavioral finance complement the traditional finance paradigm of efficient markets populated by rational participants. This course counts as 2 credits towards the 16 credit minimum for the finance concentration requirement. Prerequisite: SME2021


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 (General Elective) 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 techiques 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. Prerequisite: SME2021


FIN3560 Financial Markets and Instruments (General Elective) This course provides the student an understanding of the role the financial markets can play in managing the firm. 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, issuing securities, organized exchanges vs. OTC, stock valuation, bond valuation, cost of equity capital, interest rate determination (term structure), risk management, an introduction to derivatives, pay off profiles, binomial option pricing techniques, and an introduction to Black-Scholes. FIN3560 is a prerequisite to many advanced finance elective courses. This is also a good course for students who do not intend to pursue Finance as a specialization but want to supplement their SME coursework with additional Finance. Prerequisite: SME2021


FIN3565 Real Estate Development (General Credit) 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. Prerequisite: FIN3555 This course is typically offered in the following semester: Fall


FIN4505 Financial Trading Strategies and Risk Management 4 credit (general credit) In this course, students will learn to develop and implement strategies to make effective trading and investment decisions in an uncertain environment. Students will build quantitative models that identify, quantify, and manage the risks and expected return associated with these strategies. 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 alternative trading venues, algorithmic trading, value-at-risk, crude oil and natural gas futures, portfolio insurance, and trading volatility. The course will also cover the fundamental concepts of market microstructure, including bid-ask spreads, price discovery, information asymmetry, liquidity, and inventory risk. Prerequisite: SME2021 and any 3000 level Finance Course


FIN4510 Corporate Finance Modeling and Decision Tools (General Credit) 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. Prerequisite: SME2021 and any 3000 level Finance Course. This course is typically offered in the following semester: Fall


FIN4520 Babson College Fund 1 (General Credit) The Babson College Fund is a student managed portion of the Babson College endowment. The Trustees of the Babson College Fund select undergraduate and graduate students to be portfolio managers. Undergraduate students may apply to be portfolio managers in the spring of their junior year. If selected, students may receive up to six credits for this activity. Further information and applications can be obtained from Professor Rick Spillane (Babson College Fund Office). Prerequisite: SME2021 and Instructor Permission This course is typically offered in Fall and Spring.


FIN4521 Babson College Fund II (General Elective) The Babson College Fund is a student managed portion of the Babson College endowment. The Trustees of the Babson College Fund select undergraduate and graduate students to be portfolio managers. Undergraduate students may apply to be portfolio managers in the spring of their junior year. If selected, students may receive up to six credits for this activity. Prerequisite: SME20201 and SME2031 and SME2011 and instructor Permission Further information and applications can be obtained from Professor Rick Spillane (Babson College Fund Office).


FIN4530 Investments (General Credit) 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 and any 3000 level Finance course. This course is typically offered in the Fall.


FIN4535 Fixed Income and Structured Products General Credit 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, basis point value, and convexity; (iv) pricing and hedging of interest rate / currency 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. During the course, students will be required to obtain the Bloomberg Essentials (Fixed Income) certification. Prerequisites: SME2031 and SME2021 and SME2011 and any 3000 level finance class.


FIN4540 Corporate Financial Strategy (General Elective) 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. Recommended: ACC3502 Prerequisite: SME2021 and any 3000 Finance course and senior status


FIN4560 Options and Futures (General Credit) 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 areused. Cases address applications in both investment management and corporate finance, covering such topics as risk management, financial engineering, speculation, and arbitrage. Recommended: ACC3502. Prerequisites: SME2021 and any 3000 level Finance course and senior status This course is typically offered in the Fall.


FIN 4570 Global Financial Management (General Elective) 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: SME and any 3000 level Finance course


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 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. 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: FIN3555
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