Master of Financial Analysis Curriculum

An introduction to financial statement analysis which builds on the fundamentals of accounting, including understanding the accounting equation and its application in building the balance sheet, the income statement, and the statement of cash flows. Basic accounting concepts, accounting principles, and the audit report are presented. Students work in teams to analyze corporate financial statements. The relationship of economic value to accounting measurement is explored together with factors influencing management choices among competing valuation principles. Theory is applied to the valuation of the asset, liability, and owners' equity accounts. Emphasizes the heavy reliance on estimates in constructing financial statements and how management can use such estimates to strategically manage its reporting responsibilities.

Introduces theory and empirical estimation of aggregate economic relationships, including the general price level, income, output, employment, and wages. Covers national income accounting and other economic data sources, consumption, investment, the banking system and the supply of and demand for money, interest rates, prices, wages and employment, business fluctuations, and international economics.

Prerequisite: Fulfillment of calculus/statistics qualifying requirement and Managerial Economic Analysis (22:223:581) is recommended.

Quantitative methods for risk management, performance evaluation, back testing investment strategies, and preparation of company analysis reports. Topics covered are probability distributions and descriptive statistics, sampling and estimation, hypothesis testing, correlation and regression analysis, time-series analysis, principal components analysis, Monte Carlo simulation, and optimization. Exercises will be performed using SAS.

Provides a general survey of the field, including the basic principles of corporate finance, financial markets and institutions, and investment theory. Corporate finance topics covered include: the objective of the firm, the valuation of the firm, introduction to capital budgeting, capital structure analysis, and financial statement analysis. Financial markets and institutions studied include description of the capital markets. Investment analysis topics include pricing of bonds and stocks, an introduction to portfolio theory, and asset pricing models.

Prerequisite: Fulfillment of calculus/statistics qualifying requirement and Accounting for Managers (22:010:577).

Provides overview of the fields of security analysis and portfolio management. Introduces the analysis of individual investments with special reference to common stocks and bonds. Designed for the finance major who is interested in the security/investment area as a possible career.

Prerequisite:Financial Management (22:390:587)

Introduces the aspects of economics that are most relevant to the operation of the individual firm or nonprofit organization. Covers theory of individual economic behavior, demand theory and demand estimation, cost and supply, price determination, production decisions, and industry structure.

Explores the investment characteristics, pricing, and risk/reward potential of fixed-income securities. The securities covered include bonds---with and without embedded options; mortgages and mortgage-backed securities together with their derivatives such as collateralized mortgage obligations (CMO's), income-only (IO's) and principal-only (PO's) strips; interest rate swaps; and interest rate futures and option contracts. In addition, this course will explore the strategies for investing in portfolios of fixed-income securities.

Prerequisite:Financial Management (22:390:587)

The purpose of this course is to provide students with the necessary knowledge on how to use and not to use the models for derivatives. While the course will primarily focus on payoffs, usage, pricing, hedging, and institutional details of the most fundamental or vanilla versions of Options and Futures, it will also deal in some detail with more recent studies in the theory of derivative pricing. Students will acquire a robust conceptual knowledge of the fundamental issues that determine the valuation and behavior of these instruments. Though this course focuses on the intuitive economic insights of those models, some advanced math is required, including stochastic calculus. Be prepared for some necessarily non-trivial math if you take the course.

Prerequisite:Financial Management (22:390:587)

Presents techniques for analyzing a firm's current and projected financial statements for the purposes of credit analysis, security analysis, and internal financial analysis. Topics covered include financial distress prediction, evaluation of short-term and long-term loan requests, the impact of accounting information on security returns, determinants of bond ratings and yields, and the reliability of historical and forecasted accounting data. A working knowledge of spreadsheet analysis is expected. Special emphasis is placed on acquiring data from printed and computer databases and an introduction to specialized online databases and the internet.

Prerequisite:Financial Management (22:390:587) and Accounting for Managers (22:010:577)

This course is part of the Masters of Financial Analysis Program. It is designed to introduce the student to the fundamentals of real estate investment analysis and the equity and debt markets that affect real estate decision making. Emphasizing the commercial real estate sector, the student will develop the essential skills needed to make proper qualitative decisions, understand financing terms and conditions, evaluate different loan underwriting structures and investigate the relationship between owners and lenders. Students will view real estate through the prism of the corporate / institutional owner as well as the sole entrepreneur. Other topics that will be discussed include legal documentation, appraisal theory, residential lending, lease analysis, workouts and negotiations. Understanding the different types and characteristics of alternative investments, how they influence the return of an investment portfolio and the risks and benefits of these investments will be discussed. Students will be expected to have and know how to use a financial calculator.

Comprehensive coverage of the theory and practice of money management as well as in-depth analysis of the theory and practice involved when securities are combined into portfolios. Like Investment Analysis and Management, the course is designed for finance majors interested in a career in money management.

Prerequisite:Financial Management (22:390:587) and Investment Analysis and Management (22:390:603)