Course Descriptions Master of Science in Finance Program University of Macau

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1 Course Descriptions Master of Science in Finance Program University of Macau Principles of Economics This course provides the foundation in economics. The major topics include microeconomics, macroeconomics and international economics. Appropriate references will be made to current issues in Macau, China and the international economy. Corporate Finance This course offers students a more advanced understanding of important concepts in the field of corporate finance. It covers basic topics including capital budgeting, alternative valuation methods, capital structure decisions, corporate payout policy, securities offering decisions, as well as more advanced topics (optional) such as corporate governance, mergers and acquisitions, and corporate risk management. The objective of this course is to provide students with essential tools to study more advanced courses in finance. Pre-requisite: Principles of Accounting Research Methods in Finance The objective of this course is to equip the students with necessary research methods to understand and write good reports and theses. This course focuses mainly on utilizing econometrics quantitative research methods in doing financial research. We will introduce and discuss research concepts and format in the course. Journal papers will also be discussed so as to exposure students to research topics which are common in the areas. If possible, guess speakers will also be brought in to broader the scope of research topics. With the discussion of research format, methodologies and topics, this course aims at developing students with critical thinking skills that enable them to efficiently identify, comprehend, and research financial problems. Students will complete this course with a research proposal, which will serve as the guideline for conducting their master theses. Pre-requisite: Statistics and Financial Econometrics Theory of Finance The course aims to provide students with solid theoretical frameworks in asset pricing, corporate finance, and other fields of finance. For asset pricing, the concepts of risk and return, and state prices will be introduced as a stepping stone towards the discussions of

2 more advanced topics including the Capital Asset Pricing Model (CAPM), the Arbitrage Pricing Theory (APT), and other more recent asset pricing models. For corporate finance, agency problems are analyzed in capital investments, securities offerings, and capital structure decisions. Other topics in finance such as banking and option pricing may also be covered on an optional basis. Besides the theoretical frameworks, recent developments in empirical asset pricing and empirical corporate finance will also be covered with an extensive use of academic research papers. Pre-requisite: Principles of Accounting Statistics and Financial Econometrics This course introduces the basic tools with the aid of data for decision making in finance. It covers introductory probability, decision analysis, basic statistics, regression, simulation, linear and nonlinear optimization, and discrete optimization. Computer Programming exercises, cases, and examples, deliver in SAS (by the SAS Institute Inc.) are drawn from asset pricing, market microstructure, derivatives, and other functions. Principle of Accounting The course will promote the students development of a functional knowledge of accounting information and procedures. The Balance Sheet, Income Statement and Statement of Cash Flows will be reviewed from the perspective of the user of financial information. This course will include an introduction to basic elements of the International Financial Reporting Standards. The course will also include some coverage of product costing, cost behavior analysis and financial budgeting. Numerical Methods in Finance This course features the methods of solving analytically intractable models in financial economics, i.e. models without a closed-form analytical solution. Topics include matrices and basics of computer, nonlinear equations, finite-dimension optimization, numerical integration and differentiation, function approximation, discrete time models and continuous time models. It requires mathematical background (Mathematical Techniques in Finance or equivalent) and programming basics. This course uses Matlab (by The MathWorks Inc.) to deliver programming exercises, cases, and examples. Pre-requisite: Statistics and Financial Econometrics International Finance The objective of the course is to provide the conceptual frameworks with which to analyze the principal financial decisions of the multinational company. Traditional areas

3 of financial management and other decision elements peculiar to multinational firm will be discussed. Topics in this course therefore include currency exchange rate changes, varying rates of inflation, evolution of the International Monetary System, multiple money markets, segmented capital markets, international parity relationships, the foreign exchange market, currency features and options market, swap and interest rate derivative, foreign exchange exposure and management, financial management of the multinational firms and country risk. Fixed Income Securities This course studies fixed income securities and related derivatives. The course focuses on analytical techniques and application of models, rather than market details. A range of topics will be covered, which includes pricing of fixed-income securities, credit rating, term structure models, duration analysis and convexity. Practical techniques and derivatives would also be discusses such as yield curve trading strategies and immunization techniques, fixed income securities with embedded options, and derivatives with fixed income underlying securities. Financial Engineering and Derivatives Modern financial decisions are made in short period of time, therefore efficient modeling is essential to excel in financial markets. This course learns about advanced derivative pricing models. Content are based on practical models and modeling techniques, and understanding their applicability and limitations, and then build an integrated model for application. Student will learn how to decide what stochastic factors should be incorporated in an appropriate pricing model for a derivative, how to price derivatives and define hedging strategies, and able to integrate the selected factors and formulate a consistent model. Risk Management and Credit Risk This course focuses on risk management techniques in multinational corporations and credit risk management. A strand of risk management topics would be covered such as foreign exchange, money market instruments, derivative products, risk exposure of corporations, measurement of exposure, and risk management in financial institutions. The credit risk will discuss various economic and financial factors that affect credit quality of corporations, evaluating corporation s debt servicing ability and their likelihood of default. Topics covered will include business and financial risk analysis, debt covenants, security structures, credit scoring and credit rating models

4 Global Macroeconomics The goal of this course is to expose students to some selected tools in economics (such as GDP, wages and unemployment, price level and inflation, aggregate demand and supply, interest rates and asset values, flexible and fixed exchange systems, balance of payments, monetary and fiscal policy) necessary to do macroeconomic analysis with a global prospective. To achieve our aim, this course considers some current global macroeconomic issues: 1) economic growth and its disparities; 2) globalization and its impact; 3) international trade and exchange rate policy; 4) financial market development and corporate performance. Commercial Bank Management This course is structured around the microeconomic problems of financial management of banking firms. It focuses on decision making and offers a unique approach to understanding commercial bank management. Topics to be covered include banking trends and competition, performance analysis, liquidity planning, interest rate risk management, credit risk analysis, cost of funds, and capital management. Both domestic and international banking activities will be examined. The objective of this course is to provide the student with the conceptual framework necessary to analyze and comprehend the current problems confronting managers of commercial. Financial Markets and Institutions Financial markets and financial intermediaries are crucial to a well-functioning economy because they channel funds from those who do not have a productive use for them (savers) to those who do (borrowers). This course covers topics in the operations, structure and functions of financial markets and institutions. The mainstream financial markets to be introduced include the stock, money, bond, mortgage, and exchange rate markets. At the same time, key financial institutions in modern times such as commercial banks, mutual funds, insurance companies, pension funds, and investment banks are also presented. The goal of the course is to establish a good understand how financial markets and institutions are developed and function, and why they are a vital part of the economy. Investments and Portfolio Management This course focuses on designing and managing investment portfolios for investors. It introduces students to investment media and techniques. It analyzes capital market theories, the pricing efficiency of security markets, investment strategies, and

5 investment performance evaluation. Topics therefore include investor risk preferences, modern diversification theory, securities analysis, asset pricing models derivative instruments (models and real would behavior), investment strategies. Investment strategies include both the passive and active strategies, technical trading strategies and trading strategies arose from market anomalies. Advanced Topics in Finance This course covers advanced topics in finance that may arise due to the advances in the areas of corporate finance, investment and banking. The topics will be timely and may arise through emerging theory, new model or empirical research in the finance world. Pre-requisite: Theory of Finance Corporate Governance This course will cover the nature of corporate governance ideas and actualities on the principal stock markets of the world. The extent to which the recent Enron, World Com and Disney cases shed light on the aspirations of the founders of corporate governance is discussed with a view to distinguishing necessary from sufficient conditions for the effectiveness of non executive directors. The role of Audit Committees, independent Chairs and compliance officers are examined. The compliance v performance issues widely aired in the USA are reviewed. The effect of share clustering in the major Asian stock markets on the applicability of Anglo-American notions of good governance is explored. The other tools of political science that may shed light on corporate board behavior are reviewed. Mathematical Techniques in Finance This course covers the standard mathematical techniques of calculus, algebra in models of financial economics. Topics include linear spaces, matrix algebra, real analysis and Markov chains. In addition, the class will go over some stochastic calculus in continuous time mathematics such as Brownian motion, Ito process and Feynman-Kac equation as well as application in dynamic asset pricing. Chinese Financial Markets This course provides a comprehensive introduction to the histories, statuses, regulations and microstructures of financial markets in China. As an emerging economy, China has become capable to exert so much influence to her counterparts in the world. While institutions in China s financial markets share common features with those in the

6 developed economies, they also possess unique characteristics. This course will introduce the stock, money, bond, and the foreign exchange markets in China, with the purpose of helping students to develop insight and understanding about the differences between financial institutions in China and Western countries, and its implications for China s economic growth. Financial Frontiers This course introduces advanced topics and recent developments in finance. Pre-requisite: Theory of Finance Organizational Behavior The course presents frameworks for explaining human behavior in the workplace. Through these frameworks, students will be intellectually equipped with tools to manage employees, work teams, and organizations effectively. Topics include basic attributes of individuals, theories of motivation, job design and work arrangements, group development and processes, organizational structure and design, organizational culture and organizational change. Pre-requisite: Relational Skills for Managers Human Resources Management This course aims to develop within students the capacity to understand the complexity of managing people. Participants of this course will carry out an in-depth investigation into such topics as recruitment, compensation, and training. The course will also introduce participants to current debates within human resource management. Pre-requisite: Relational Skills for Managers Marketing Management This course seeks to equip students with the key conceptual, analytical and problem solving skills to address marketing problems and decisions. Specifically, it introduces students to various marketing analyses (customer, competitor and company analysis) and marketing strategies. Tools and methods used in planning and implementing the four Ps (product, price, place and promotion) will be explored. This course integrates theory and practice within the context of organizations operating locally and globally. Business Ethics This course will train students in critical thinking about the claims of various stakeholders over business practices. Ethical reasoning will be taught so that students

7 can distinguish factual reports from opinions, recognize breaches of Hume s Law or examples of the Naturalistic Fallacy and of ethical relativism. The theory and evidence of Kohlberg & Gilligan proportions concerning ethical evolution will be reviewed. The ethical issues of most general concern are analyzed: Piracy, sweatshops, misrepresentation, whistle-blowing, corruption, dumping, pollution, arbitrary abuse of executive power and financial scandals. Cases are used sparingly to illustrate general principles. The emphasis is on acquiring the thinking skills necessary to recognize and resolve difficult ethical problems in the workplace. Pre-requisite: Relational Skills for Managers Advances in Management Studies This course provides students with the opportunity to focus on a particular contemporary issue in managing people and organizations, utilizing the most recent advances in theory and practice in the field. Pre-requisite: Organizational Behavior Global Business This course enables students to conduct analyses of the cultural, legal, political, financial, and economic factors affecting the global business environment. Substantial attention will be paid to integrated, multidisciplinary applications of knowledge. A case-based approach is used.