The active management of portfolios consisting of domestic and international securities. The estimation of portfolio inputs, the construction of desirable portfolios, and the evaluation of portfolio performance. Selected cases are analyzed by the students. The use of derivative securities to achieve financial goals. Specific cases involve the use of derivatives and other financial innovations to reduce risk, lower the cost of financing, improve portfolio yields, or help the corporate firm achieve strategic goals.
Students analyze, present, and critique cases.
The evolving roles of financial intermediaries, regulation, and capital markets in the financing of American businesses and the provision of savings and payments mechanisms for individuals. The securitization of traditional loan products and the determinants of the term structure of interest rates. Management of risks associated with interest rates, credit, liquidity, and exchange rates. Attention is devoted to commercial banks, pension funds, investment banks, and other firms. A financial institution decision game is typically included in the course.