2009-2010 Undergraduate Catalog

All programs offered by the Foster College of Business Administration, Bradley University, are accredited by the AACSB International: The Association to Advance Collegiate Schools of Business.

Finance and Quantitative Methods Course Descriptions

Actuarial Science—Business

Insurance aspects of risks. Nature of risk assessment control and financing activities in organizations. Firm risk policy issues. Cross-listed as BMA 315. Prerequisites: junior standing.

Finance

Principles and practice of management of personal income, wealth, and credit: budgeting, sources of financing, savings, estate planning, and institutions of personal finance.

Capital budgeting and principles of financial management. External and internal sources of funds: costs and profitable uses in business organizations. Prerequisites: ATG 157 and junior standing or 42 credit hours and declared finance or actuarial science first major.

Financial characteristics of international business. International exchange, liquidity, markets, investments, and banking, in context of historical development, environmental characteristics, economic factors, political systems, and legal constraints. Emphasis on exchange rate exposure management. Cross listed as IB 323. Prerequisites: ATG 158; ECO 222; junior/senior standing.

Principles of investment analysis. Introduction to security valuation using fundamental analysis with associated trading rules. Introduction to technical analysis/charting with trading rules. Functions and descriptions of securities markets and trading. Prerequisites: FIN 322, QM 262.

Overview of options, futures, swaps, and related financial securities. Examination of exchanges, pricing issues, arbitrage, and trading strategies. Applications emphasize the use of derivative securities for managing financial risk. Prerequisites: FIN 322, QM 260.

Operation of financial institutions and interrelationships between their operations and economic activity; credit flow and money movements, in the context of financial institutions’ operations. Structure and organization of the financial system; emphasis on markets and intermediaries. Prerequisites: ECO 100 or ECO 221; ECO 222; junior standing.

The role of commercial banks in the capital markets; introduction and application of financial management concepts, tools, and techniques to the fundamental financial decisions that managers of commercial banks make. Focus is on the dynamic banking environment, regulations, nature of risks, asset and liability management, investment and credit decisions, and financing decision of commercial banks. Prerequisite: FIN 322.

Examination of the increasing use of marketing techniques in the financial services industry and the changing environment of financial services. Course is structured around the core marketing principles of buyer behavior, segmentation, product development, distribution, pricing and promotion, as well as topics such as relationship marketing, customer loyalty, and technological developments. Designed for students with an interest in banking, insurance, securities, and other financial services industries. Cross listed with MTG 330. Prerequisites: FIN 322, MTG 315.

Planning and strategies involved in starting or expanding a business. Emphasis on capitalization, record keeping, liquidity management, fixed asset management, financial analysis, expansion strategies, establishing firm value, and exiting the firm. Cross-listed with BMA 384. Prerequisites: BMA 352; FIN 322.

Managing firms’ liquidity position; emphasis on use of positive and normative models dealing with short term assets and liabilities; ensuring liquidity while enhancing firm value. Prerequisite: FIN 322, QM 263.

Interpretation and analysis of corporate financial statements. Current annual and interim reports as a source of data for management, stockholders, and creditors. Prerequisite: FIN 322, QM 263.

Complex problems of the corporate finance manager. Emphasis on modern finance tools in managerial decision making. Recent literature of corporate finance. Prerequisite: FIN 322, QM 263.

Long-term capital investment decisions and long-term financing. Strategic wealth creation, general valuation principles, evaluation of net present value rule, alternative capital budgeting methods, ranking projects, taxation, marginal cash flows, and the impact of inflation. Single-investment risk analysis, risk analysis for top management and fully diversified investors, cost of capital, capital structure, dividend policy, interactions between investment and financing decisions, leasing, and capital rationing. Prerequisite: FIN 322, QM 263.

Introduction to portfolio theory. Diversification concepts. Market-oriented capital asset pricing model, options pricing model, and arbitage pricing theory. Market efficiency. Relationship of portfolio theory to fundamental and technical analyses. Portfolio management and evaluation techniques. Prerequisites: FIN 325; QM 260; QM 263.

Modeling financial processes, cash flows, security prices, etc., for decision making. Econometric, distribution-based, Markov and Stochastic Process concepts are employed. Treats risk/uncertainty identification, measurement and management. Prerequisites: QM 260; QM 263; FIN 322, and one additional jr./sr. finance course.

Topics of special interest which may vary each time course is offered. Topic and prerequisite stated in current Schedule of Classes. May be repeated under different topics for a maximum of nine hours credit.

Contemporary review of theory and practice of financial risk management. Principles for managing financial risk are applied to interest rates, exchange rates, and commodity prices. Financial engineering is incorporated into unified ethical and sustainable managerial problem solving and policy decisions designed to achieve successful operations. Supporting financial elements areas are integrated to understand and appreciate their interdependencies and benefits as a culminating academic experience. Prerequisites: 12 hours of finance at 300 or 400 level.

Studies undertaken by academically qualified students under guidance of a faculty member. Open to Finance and Quantitative Methods Department majors only. May be repeated under different topics for a maximum of six hours credit. Prerequisites: junior/senior standing; 2.5 of cumulative grade point average; consent of Department Chair.

Quantitative Methods

Introduction to mathematics of finance. Emphasis is placed on the applications of mathematical techniques to important financial concepts such as capital budgeting, measures of risk and return, investments, and market efficiency. Techniques of optimization as applied to diversification and portfolio management. Prerequisite: MTH 115 or MTH 121.

Data presentation and computation of descriptive measures. Probability theory, probability distributions, expectations, variance, covariance, and correlation coefficient. Sampling, central limit theorem, statistical estimation, one or two sample tests of hypotheses. Prerequisite: MTH 109 or equivalent; BMA 172.

Linear and multiple regression, correlation, analysis of variance, contingency tables, time series, decision theory, and non-parametric methods. Data analysis using statistical computer packages. Prerequisites: QM 262; MTH 115 or 121.

Develops basic principles and techniques of forecasting through integration of scientific and judgmental forecasting in financial applications. Objective analysis of historical data is combined with subjective insight to demonstrate how data for budgets can be developed, profits maximized, and risks reduced. Emphasis on use of forecasting by individual firms. Prerequisites: QM 263 and junior/senior standing.

Deterministic and probabilistic models of management science and use of computer-based support for the decision making process. Models such as linear and integer programming, transportation and assignment problems, CPM/PERT, simulation and queueing models. Applications in a variety of business areas using the computer. Prerequisites: BMA 172 or equivalent; QM 262; junior/senior standing.

Topics of special interest which may vary each time course is offered. Topic stated in current Schedule of Classes. May be repeated under different topics for a maximum of six hours. Prerequisite: junior/senior standing.

Studies undertaken by academically qualified students under guidance of a faculty member. Open to Finance and Quantitative Methods Department majors only. May be repeated under different topics for a maximum of six hours. Prerequisites: junior/senior standing; 2.5 cumulative grade point average; consent of Department Chair.

Risk Management and Insurance

The fundamental aspects of risk management and insurance (RMI). Emphasis on understanding the nature of risk assessment, control, and financing activities for organization. RMI policy issues impacting the firm (e.g., discrimination, health care and financing, environmentalism). Cross-listed as BMA 315. Prerequisite: junior standing.

The nature and importance of risk analysis; qualitative and quantitative risk analysis data; user-friendly approaches to constructing statistical estimates for risk; loss analysis; using risk and loss estimates in decision making and related public policy issues (e.g., fair versus unfair risk factors). Prerequisites: RMI 315; QM 262.

Functional analysis of the operations of insurance organizations; legal organization, marketing systems, management and control, underwriting, rating, financial analysis, rate making and regulation. Prerequisite: RMI 315.

Small teams examine various risk management scenarios and make appropriate recommendations. Students conduct a risk management review for a local small business and make appropriate recommendations. Emphasis on enhancing written and oral communication skills. Prerequisites: RMI 315; RMI 365 or 415.

Studies or research undertaken by academically qualified students under the guidance of a faculty member. May be repeated for a maximum of 6 semester hours. Prerequisites: RMI or ASB major and consent of RMI program director.