IRV-R12

IRV-R12
PGDM-RM 2012-14: Term-III

Course Name : Introduction to Risk and Valuation

Credits	1.5
Faculty Name	Dr Soumya G Deb
Program	PGDM(RM)
Academic Year and Term	2012-14 batch Term -3

1. Course Description: The course lays the foundation for further study of corporate finance and related courses for the student. The course revolves around the fundamental theme of finance: valuation. The course begins with the basic building blocks in that context like time value of money, concept of cash flows, discounting, compounding, present value and future value. We then learn to apply these tools to value some of the basic financial securities like stocks and bonds. Towards the later part the course introduces the concepts pertaining to risk and return in capital markets and some of the fundamental models relating them. It also discusses the concepts of market efficiency and its implications. At the end of the course the students shall have an overview of the basic relation between risk and return in the financial markets, how to value basic securities and probably take simple investment decisions.

Welcome to the course!

2. Student Learning Outcomes (typically 3-5 bullet points)

· Be able to : have an overview of the basic relation between risk and return in the financial markets

· Be able to …. to value basic securities like stocks and bonds

· Be able to … take simple investment decisions.

3. Required Text Books and Reading Material

a) Textbook:

Fundamentals of Corporate Finance by Stephen A Ross, R W Westerfield and B. D Jordan –8th Edition, ( Subcontinent edition) published by Tata Mcgraw Hill

b) Reference Book:

- Financial Management: Theory and Practice –11th Edition by Brigham and Ehrhardt, Thomson India edition

- Principles of Corporate Finance - 8th Edition, by Brealey, Myers, Allen and Mohanty, Special Indian Edition, Tata Mcgraw Hill,

c) Class ppt printouts

d) Readings as and when made available in class

Tentative Session Plan :

Session
Topics Covered

1,2,3
Building blocks :
· Introduction,
· Time Value of money

4,5
Application of time value of money concepts to value debt securities like bonds :
· Bond Pricing
· Bond Features

6-7
Application of time value of money concepts to value common stocks

7-10
Risk, Return and Capital Markets
· Concepts of risk and return in isolation
· Concept of risk and return in a portfolio context
· CAPM
· Market Efficiency

5. Evaluation:

The evaluation is divided into three components:

(a) Quiz /mid term: 30%: May be open book or closed book (that would be announced in class).

(b) Class Participation/Project: 10%: This could be comprised of attendance, response and attitude in class, and/or some group projects.

(c) End Term: 60%: The end term examination will be a closed book one based on topics covered during the entire course.

6. Academic Integrity: Students involved in academic dishonesty will receive a ZERO grade on the particular component in which the violation occurred. Academic dishonesty consists of misrepresentation by deception or by other fraudulent means such as copying or use of unauthorized aids in tests, talking during in-class examinations; aiding another student’s dishonesty; and giving false information for the purpose of gaining credits.

Created By: Debasis Mohanty on 12/07/2012 at 03:05 PM
Category: PGPRM-I Doctype: Document

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Session	Topics Covered
1,2,3	Building blocks : · Introduction, · Time Value of money
4,5	Application of time value of money concepts to value debt securities like bonds : · Bond Pricing · Bond Features
6-7	Application of time value of money concepts to value common stocks
7-10	Risk, Return and Capital Markets · Concepts of risk and return in isolation · Concept of risk and return in a portfolio context · CAPM · Market Efficiency