Finance

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.

Finance

FIN2520 - PERSONAL FINANCE

PERSONAL FINANCE

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

4 credits

FIN3511 - RESIDENTIAL REAL ESTATE

RESIDENTIAL REAL ESTATE

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

4 credits

FIN3512 - REAL ESTATE TRANSACTIONS AND LAW

REAL ESTATE TRANSACTIONS AND LAW

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

4 credits

FIN3515 - CORPORATE FINANCIAL MANAGEMENT

CORPORATE FINANCIAL MANAGEMENT

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.

Recommended: ACC3502
Prerequisites: SME2021

4 credits

FIN3520 - SECURITY VALUATION

SECURITY VALUATION

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.

Recommended: ACC3502
Prerequisites: SME2021

4 credits

FIN3535 - FINANCING AND VALUING SUSTAINABILITY

FINANCING AND VALUING SUSTAINABILITY

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

4 credits

FIN3555 - REAL ESTATE INVESTMENT

REAL ESTATE INVESTMENT

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

4 credits

FIN3560 - FINANCIAL MARKETS AND INSTRUMENTS

FINANCIAL MARKETS AND INSTRUMENTS

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

4 credits

FIN3565 - REAL ESTATE DEVELOPMENT

REAL ESTATE DEVELOPMENT

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.

This course is typically offered in the following semesters: Fall


Prerequisites: FIN3555

4 credits

FIN4505 - FINANCIAL TRADING STRAT AND RISK MGT

FINANCIAL TRADING STRAT AND RISK MGT

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

4 credits

FIN4510 - CORPORATE FINANCIAL MODELING & DECISION TOOLS

CORPORATE FINANCIAL MODELING & DECISION TOOLS

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

4 credits

FIN4520 - BABSON COLLEGE FUND I

BABSON COLLEGE FUND I

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

4 credits

FIN4521 - BABSON COLLEGE FUND II

BABSON COLLEGE FUND II

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

4 credits

FIN4530 - INVESTMENTS

INVESTMENTS

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.

This course is typically offered in the following semesters: Fall


Prerequisites: SME2021

4 credits

FIN4535 - FIXED INCOME AND STRUCTURED PRODUCTS

FIXED INCOME AND STRUCTURED PRODUCTS

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

4 credits