FIN3101 - Corporate Finance
Prereq: FIN2004/FIN2004X (this mod - Intro to Corp Fin- has its own prereq, ACC1002/ACC1002X)
What's it about: The most useful things I picked up from this module are corporate share valuation and capital budgeting (calculating NPV of a project). These are hard skills you can expect to use in a future executive/analyst position. If you're a non-biz student you MUST observe how your biz friends set up their excel spreadsheets (you get grilled about it in the Q&A for your final presentation). Other stuff that is less common in real life: mergers/acquisitions, efficient market hypothesis, capital structure.
Exam tips: 1. Don't take cheat sheet for granted; study the relationships between company decisions and the important financial ratios/indicators. For example, stock splits and their effect on P/E ratio, dividend policy on share price. 2. Be able to show, in working, the difference between all the available capital budgeting and structuring decisions. Eg for capital structure: show, in working, what is the difference to a company's market value if it issues XXX of debt instead of issuing new stock worth XXX?
Continuous assessment: The composition changes from year to year, and includes two written critiques of other groups' case studies (group), tutorials (group), one case study with final presentation (group), 3 class quizzes + class participation (up to 10%), midterm (20%), final exam (30-40%). As you can probably tell, if you are zai and score full marks in the midterm and final (it's possible), it will still not be good enough. Good group work is not hard, generally all groups do similarly well compared to each other. IMO, speaking up in class is the key to anything above a B+. Plus it benefits your learning (because the prof is really nice and, no matter how stupid your question is, always uses your question to start a discussion and learning point).
Case study: My group did common share valuation in evaluating Keppel Corp's acquisition of Keppel Land. I can't remember the exact details about the other cases, but they all required setting up some cash flow analysis in Excel. To get the A, you need to have a clear understanding of the assumptions and data manipulations that you used in your excel model (everyone's model is different, your classmates will compare them to the other groups who did the same case). Every detail matters, for example, which country's risk free rate you chose and why? And also, be able to justify which share valuation method (where there's more than one) is the most appropriate to your case. To get the A PLUS, do a sensitivity analysis of your model and find out which factor accounts for the highest fluctuations in share price.
FIN3102 - Investments and Portfolio Analysis
Prereq: Same as FIN3101
What's it about: The relationships between risk and return for the three classes of investments: stock, bonds and derivatives. You also learn about efficient market hypothesis here (there are some overlaps with FIN3101), but you go further in applying the theory to portfolio construction and optimization.
Exam tips: Be prepared for questions that combine stocks and bonds/ stocks and derivatives. There was a question about comparing the profit from short selling a stock and buying a put on the underlying stock.
Continuous assessment: Same as FIN3101. For this mod, class part is more intense; you need to do the assigned questions at the end of the lectures, make sure your working can be explained clearly, and really FIGHT for the chance to present them in class, very competitive.
Case study: CHOOSE YOUR GROUPMATES WISELY! If you a non-biz, make sure you have biz people in your team. This mod has something of a reputation as - I am not kidding - one of the most difficult modules in NUS even for biz majors. Financial modelling experience is a plus, but those complex portfolio construction and regression problems (in EXCEL format, no less) will be quite new to the biz ppl as well. Be prepared for lots of data-intensive and tedious work.
I am doing a very bad job of selling this module. In fact, I highly do NOT recommend it unless you own the textbook beforehand and have done some self-study on financial modelling. If you are non-biz, frankly speaking FIN2004X is not adequate preparation. Unless you are a programming or math genius, take some other level 3 FIN mods to get a feel of what finance mods at this level require before taking on this.
