This is a core course for students interested in a career in finance – in a bank or investment bank, in corporate finance or treasury, or as an investment analyst. For students that are not finance majors (such as JD/MBA or MFE students) the course offers an appreciation for how companies raise capital.
Course Scope and Mission
The aim of this course is to apply the theoretical underpinnings of corporate finance to real Corporate Financing situations. This course could also be called “How Companies Finance” with an emphasis on the various products (debt, equity, prefs, private equity) and processes (public, private, bought, marketed etc), as well as some industry specific financing methods (real estate and mining) . In keeping with the concept of “how corporate financing is really done” the class consists of lecture format for half of the class and a series of current market discussions, case presentations and analysis and a “Live Case” to design a Financing Plan for a public company. While other finance courses look more internally (cash cycle, new projects decisions) this course starts at the point where the company needs funds. The class discussions revolve around transactions that have happened and current financings in the market place that help illustrate corporate financing solutions.
This is a required course for students in the corporate finance/investment banking stream. It can be taken concurrent or before RSM2300 Corporate Financing or RSM2309 Mergers and Acquisitions. It should also be of interest to those students who simply wish to have a better understanding of how firms manage their working capital and make capital budgeting decisions. It is also the designated finance for non-finance specialist course.
The course is designed to deepen the understanding of basic financial management decisions within a non-financial corporation and focuses on the application of modern financial techniques to operating and investing decisions. It comprehensively analyzes working capital management and capital budgeting decisions within the context of the firm’s business strategy. The course consists of two parts: the management of working capital (including short term financing), and internal long-term asset acquisition (investment a.k.a. capital budgeting and Capex) decisions.
The course looks at the management of working capital and the organic acquisition of long-term assets and deals with the following critical questions:
- What is the cash cycle within the firm?
- How can the firm forecast its cash requirements?
- How can the firm develop its cash budget?
- What is the difference between seasonal, cyclical and secular demands for funds?
- How can banks structure lending agreements to manage the different funds requirements?
- How does securitization affect short term liability management?
- What are the advantages of leasing versus borrow/purchase and how should such a hybrid decision be made?
- How are incremental cash flows determined for investing decisions?
- How can the firm evaluate replacement, expansion, new product development, international and strategic investment decisions?
- How can real options analysis help make better investment decisions?
Security Analysis and Portfolio Management
This course targets students who are interested in the conceptual framework and real word practice of portfolio management. It provides a solid background for those who plan to work in the funds management industry in any capacity, and for those who have a strong interest in investing. Taught by a former institutional portfolio manager, the course is also useful for students who are working towards the CFA designation which is required of almost anyone who plans a career in analysis, portfolio management or sales/trading.
This course expands on investment concepts. It focuses on theories and techniques that underlie the construction and management of optimal investment portfolios, emphasizing the risk-return tradeoffs that are appropriate for different types of investors.
It explores key elements of the investment management process, including development of objectives and constraints, implementation and performance measurement. The characteristics of stocks and bonds are discussed, with an emphasis on valuation metrics and performance drivers. By managing fictitious funds via trading real securities, students will apply their classroom knowledge and shrewd judgments to real-world investing.
The course covers theoretical concepts, some empirical methodology and their application to real markets and portfolios. Through a combination of lectures, readings and case discussions, students explore key elements of practical asset allocation, security valuation and style investing. Students will apply their knowledge by managing portfolios on the Rotman Portfolio Management System (RPM).
Risk Modeling and Financial Trading Strategies
This course is primarily targeted to those interested in developing their skills to make effective financial decisions for an uncertain future. These skills have general applicability but may be particularly relevant for securities trading, investment and risk management.
- To learn to make effective financial decisions when the future is uncertain
- To develop strategies associated with various securities and investment objectives
- To identify, quantify, and manage risks associated with those strategies
This Lab-based course will integrate theory and practice by using simulation cases and real-time data links to both a simulated market and to quotes from actual markets. In particular we use: The Rotman Interactive Trader (RIT) platform, which simulates an order-driven market, to deliver learning-by-doing cases which, coupled with Excel support applications to apply the relevant theory, will guide decision making and allow us to derive effective strategies when faced with uncertainty and quantifiable risks. This training is analogous to using a flight simulator.
Financial Institutions and Capital Markets
This course is meant for any students interested in understanding how financial institutions and capital markets function. The focus is on current issues facing management in the financial service sector. The course would be of great interest to students contemplating a career in financial services and also those just wanting to gain a general knowledge of how markets work. The material is accessible and general enough for all business majors as it provides a solid understanding of financial markets, needed by anyone working in business management.
Course Scope and Mission
The course first provides a qualitative description of commercial banks, investment banks, insurance companies, mutual funds, and central banking. For each institution, the course discusses their basic business practices as well as the regulations and regulators guiding each institution. From a macroeconomic perspective, we consider how each of the institutions plays a role in economic activity and growth. We also consider some of the incentive problems with individuals managing their investments through institutions. These incentive problems provide the grounds and needs for regulation. Finally, the course considers the role of a central bank and describes how commercial banks work alongside the central bank to implement monetary policy. Throughout the course, discussion is raised about current interest rate policies and the implication of high- and low-rate interest rate environments for numerous institutions. Cases are used throughout the course to provide examples and illustrations of the challenges facing capital markets and financial institutions.
International Financial Management
This is a recommended course for students following the corporate finance/investment banking major. More generally, the course should be useful for students interested in the international aspects of finance.
Course Scope and Mission
In frictionless and integrated world markets we would expect that the country an investor resides in or where a firm is incorporated should not matter. Although the process of globalization has reduced many barriers to international investment for both firms and portfolio investors, countries and borders continue to have a major impact on many aspects of finance. For example, the country where an investor resides has a major impact on his or her portfolio choices and consumption decisions. The country where a firm is incorporated affects its ownership structure, capital structure, and corporate governance choices. Importantly, when investors and firms cross a border into another country, it changes the opportunity set, incentives, and risks that they face. For example, investors can lower the risk of their portfolios by diversifying internationally; firms can raise capital abroad, often on better terms than they could get at home. With these benefits come additional risks, such as currency risk and political risk that can have a major impact on firm value. Further, issues such as different accounting standards, tax rules, and institutional constraints can make crossing borders a challenge for both firms and investors.
The goal of this course is to provide a framework for making financial decisions in an international context. Therefore, the course extends the principles of investment analysis and financial management to the international environment. The course covers a broad range of interrelated topics such as:
- Currency markets and parity conditions
- International investing and portfolio diversification
- Understanding and managing exchange rate risk
- Raising capital in global markets
- Project finance
- International capital budgeting and political risk
Options and Futures Markets
Students who expect to work in finance or who have some interest in derivatives markets.
It aims to provide students with an understanding of derivative instruments including their use in trading and risk management. This is the first of a three-course sequence in risk management and financial engineering. The other courses in this sequence are Advanced Derivatives and Risk Management and Financial Engineering.
This course covers forwards, futures, swaps and options. By the end of the course, students will have good knowledge of how these contracts work, how they are used and how they are priced. They will also gain hands-on experience through an RPM hedge fund project.
This course covers advanced material. It is intended for students who have a quantitative background.
Objective is to enhance student’s knowledge of the way in which derivatives can be analyzed.
The course starts with Black-Scholes analysis. This leads to a variety of approaches commonly used to value derivatives. This technology is then applied to a variety of exotic contracts. The second half of the course focuses on the types of models used in the swap market and volatility derivatives
Financial Risk Management
Students expecting to work in finance, particularly those who would like to work for a bank or other large financial institution.
To explain important issues concerned with the way banks throughout the world manage risks. Bank regulations including Basel III and Dodd-Frank will be covered. Many of the topics are applicable to non-bank institutions and to non-financial corporations.
This course deals with the ways in which risks are quantified and managed by financial institutions. Among the topics covered are types of financial institutions, the regulation of banks and other financial institutions, market risk, credit risk, operational risk, liquidity risk, model risk, and economic capital.
Mergers and Acquisitions
This is a recommended course for students following the corporate finance/investment banking major. More generally, the course should be useful for students with non-finance majors (e.g. JD/MBA or MFE students) interested in investment banking, private equity, funds management, consulting, corporate development, entrepreneurship, accounting and control, business journalism, economic analysis, and advising senior management.
The objective of the course is to provide an understanding of the drivers of value creation and destruction in mergers and acquisitions (M&A) and to develop skills in the design and evaluation of these transactions. Participants will analyze M&A deals from the perspective of a financial advisor, integrating issues from economics, accounting, law, strategy, and organizational behaviour where appropriate. In addition, the course will bring in the perspectives on M&A deals of other key players, such as stock market participants, regulators, corporate insiders, creditors, and other stakeholders.
The class sequence roughly follows the timeline of a deal and related activities. We will start with the review of the current state of the M&A market and recent trends, followed by a discussion of the role of takeovers in corporate finance and corporate governance. We will then move on to the analysis of value creation in M&A and apply standard and M&A-specific valuation tools to evaluate acquisition deals and the associated synergies. This is followed by a discussion of how M&A strategies interact with firms’ financing policies and how payment methods are chosen. We will also discuss various differences between financial buyers (leveraged buyouts) and strategic (trade) buyers. Moving on to deal structuring, we will discuss contractual features of merger agreements and legal aspects of M&A deals. We will then address the more specialized issues such as the role of stock market and competition regulation, merger arbitrage, and post-merger integration. Finally, we will explore organizational restructuring (break-ups, spin offs, split offs, carve-outs) as well as financial restructuring/distress situations in the context of M&A deals. You will then have an opportunity to integrate all of the above in a deal concept assignment, whereby you will be required to design an M&A deal for a real firm and pitch your proposal to a panel of practitioners.
Analysis and Management of Fixed Income Securities
Students interested in pursuing a career in fixed income or interested in gaining a solid understanding of the bond market generally. The course will provide the tools to analyze and understand various bond structures, simple yield curve strategies and the different fixed income products across the credit spectrum.
- Linking bond theories with practice - use of 'mini' cases in class to demonstrate/apply theory to real issuers
- Building knowledge of current fixed income markets and issues
- Become familiar with:
- Interest rate risk management
- Term structure modeling
- The market of defaultable securities
- Structuring deals - ability to understand and analyze a prospectus and bond trust indenture
- Understanding of bond mathematics, bond pricing and relative value of product across the credit spectrum
This course describes important fixed income securities and markets. It will provide an overview of traditional bond and term structure concepts as well as review a number of bond structures relevant to the different sectors of the fixed income market.
Students interested in a rigorous course on company evaluation using the Value approach.
The focus of this course is on the fundamental value-based approach to investing pioneered by Benjamin Graham and developed by Graham and David Dodd. The overall objective of the Graham/Dodd approach is to find undervalued companies based on their estimated intrinsic values. The critical element in the Graham approach is the search for the “margin of safety” (i.e. the purchase of $1.00 of intrinsic value for $.50).
The emphasis of this course is on both intellectual stimulation and practical rigorous applications, through the security analysis project. The course has a heavy participation component and emphasizes the development of both quantitative analytic skills and presentation skills. By completing this course the student should be able to conduct a full equity analysis of a company including a rigorous quantitative and qualitative assessment, culminating in a valuation conclusion. The student will develop their ability to present their conclusions in a coherent and professional manner. The value investing course received a $1,000,000 gift from a generous donor in 2006. The Value class will provide recommendations for maintenance and changes to the $1,000,000 VIP.
Blockchain and Decentralized Finance
The introduction to technology is geared towards management students and does not require engineering or computer science knowledge; the focus is on finance concepts, the institutions, and the economic insights and implications.
- Understand the technological and organizational principles of blockchain technology.
- Get introduced to existing protocols, tools, and applications of blockchain technology to finance.
- Understand the economics of decentralized platforms.
- Understand legal, regulatory, and accounting challenges as well as the challenges to the legacy financial industry.
- Identify business opportunities of the technology and develop a design for a decentralized finance application.
The course introduces students to the nascent area of decentralized finance, the provision of financial services in decentralized networks, without the default involvement of financial institutions. Technological changes such as cloud computing and blockchain technology allow organizational changes that will change and replace the core operations and infrastructure of the financial industry. We will study how and which financial services that have traditionally been provided by “siloed” institutions can be provided on “decentralized platforms.” We will study the functions of these platforms both in terms of the basic technological functionality and the economic mechanisms that drive the interactions on platforms. As part of the content, students will learn about blockchain technology, cryptography, smart contracts, tokens, digital money, oracles, yield farming, decentralized exchanges, Blockchain-based borrowing and lending, Crypto Trading, Corporate Finance with Tokens, Stablecoins, Libra/Diem, and central-bank-issued digital currencies.
Machine Learning and Financial Innovation
Machine learning is an important branch of artificial intelligence where a computer learns from large volumes of data. Many activities within financial services (as well as other industries) are being impacted by machine learning. For example, lending decisions, investment strategies, fraud detection, the marketing of financial products, and even hiring decisions now involve machine lending. If you are hoping to get a job in finance, you should seriously consider taking this course. Machine learning and artificial intelligence are likely to have a big impact on your career.
Students will understand enough about machine learning to be able to work with data science specialists. This is likely to be an essential skill for finance professionals in the future. The course will cover the main techniques used by data scientists to handle large data sets for prediction, clustering, and interacting with a changing environment.
Python is currently the language of choice for machine learning and is now widely used in business. Rotman’s FinHub has prepared a four-week module on Python which requires about six hours of work per week. The modules will be offered starting July 5, 2021 and August 7, 2021. Unless they are already Python users, students who register for this course will be required to complete this module before the course starts. As many people have pointed out, “Python is the new Excel”. It is becoming impossible to get a many jobs without having Python on your resume.
The course will introduce students to the tools of machine learning and allow them to become comfortable with the way Python is used for machine learning projects. They will undertake some assignments on their own and larger projects in groups. There will be group presentations involving a variety of innovations that are changing the financial sector.
The Management of Private Wealth
This course focuses on the financial management issues faced by private (vs. institutional) wealth holders. It will be of interest to students in funds management who aim to service the private individual market or any student who want to develop better understand wealth management for their own personal and family purposes.
The goal of the course is to help students develop an understanding of the unique financial management problems and opportunities faced by wealthy individuals and families, and practical, integrated approaches to dealing with them. We also want to help students see and be able to apply the integrated approach required in the management of private wealth.
The course covers the following major topics:
- Understanding and quantifying client objectives
- The individual life cycle and its impact on financial planning
- The management of personal and market risk
- Asset allocation decisions and investment management
- Tax, insurance and estate planning
- Alternative investments, real estate and private equity
- Succession planning for family businesses and private wealth
Private Equity and Entrepreneurial Finance
This is a recommended course for students following the corporate finance/investment banking major. The course should be useful for students interested in consulting, entrepreneurship, venture capital, investment banking, private equity, and funds management (e.g. as an institutional investor).
The last decades have revealed a significant increase in the demand for and supply of private equity (e.g. venture capital and Leveraged Buyout Funds). Firms that receive private equity funding see a changes in incentives and constraints, affecting other firms including competitors, suppliers and buyers. These changes have produced new demands for providers of debt finance, investment banking services, consulting and diligence services. The primary objective of the course is to improve students’ ability to understand the concepts and institutions involved in entrepreneurial finance and private equity. The course utilizes tools and frameworks from economics, finance, strategy, accounting and law, applying them to case situations.
The course will be divided into three sections:
Users of private equity – This section focuses on the challenges entrepreneurs/managers face in attracting finance to fund their ideas. Students will explore frameworks to assess the qualitative and quantitative attractiveness of investment opportunities, and will consider the nuances of term sheets and how choices affect incentives and opportunities.
Private equity partnerships – This section focuses on issues facing private equity partnerships in terms of evaluating, choosing, and managing private equity investments, including the challenges of exits. This section will explore valuation frameworks as well as possible ways to improve them, as well as incentives and features in Partnership agreements with LPs.
Investors (LPs) and private equity partnerships: This section will analyze issues in structuring private equity partnerships and in raising funds for them. It will also touch on emerging issues from direct investing by pension funds, to IPOs of private equity firms, to the opportunities and challenges arising from the spread of private equity to India and China.
How Banks Work: Management in a New Technological Age
This course is designed to provide second-year MBA students with direct exposure to key business leaders from the banking and regulatory community and to provide new perspectives on important changes to the financial services industry.
The key educational objective is to develop a critical appreciation of the trade-offs that are made in managing in the financial services industry as well as a deeper understanding of the industry that many students will join.
Classroom sessions will usually include an industry guest or guests with direct experience in the topics being discussed. The theme of trade-offs between stakeholders should always be at the forefront of how students look at the industry.