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Finance

Finance covers a broad range of topics including corporate investments and financing decisions, security valuation, portfolio management, and the behavior of asset prices and investors. In addition to providing students with wide base of knowledge, Finance at Merage helps students develop new skills to unlock the potential of finance in the digital world. To support this broad objective, the members of the finance faculty are renowned for their expertise in investments, money management, behavioral finance, risk management and financial economic theory.

The Finance faculty is committed to excellence in teaching. The Finance Area offers courses in the undergraduate, MBA, Master of Finance (MFin) and PhD programs. These courses offer broad exposure to finance theory and reflect latest market practices and research findings. The School’s Bachelor of Arts in Business Administration includes basic courses in financial management and investments as well as elective courses. The Merage School’s MBA programs include the core course in financial management, which reflects the School’s digitally-driven focus, as well as elective courses. The School also offers the Master of Finance (MFin) degree that comprises a wide range of graduate finance courses. The PhD program offers an advanced, research oriented degree in financial economics and prepares students for successful academic careers.

Faculty

Nai-fu Chen
Professor Emeritus
PhDs, University of California, Los Angeles and University of California, Berkeley

David Hirshleifer
PhD, University of Chicago

Chong Huang
PhD, University of Pennsylvania

Philippe Jorion
PhD, University of Chicago

Christopher Schwarz
PhD, University of Massachusetts, Amherst

Zheng Sun
PhD, New York University

David C. Yang
PhD, Harvard University

Lu Zheng
PhD, Yale University

Lecturers and Researchers

Coursework

Undergraduate business classes may be found through the UCI course catalogue.

MBA Core Course Description

209A. Managerial Finance
The course introduces students to the key finance concepts and theories that apply generally in making financial decisions such as time value of money, risk and return trade off. It also covers main stream methodologies used by CFOs when making capital budgeting and capital structure decisions. Specifically, net present value and the discounted cash flow analysis are the main methodologies the course focuses on. Through a combination of lectures, cases, and in-class mini cases/exercises, the students learn how to apply these methodologies to businesses that operate in both traditional and technology-driven industries.

In a disruptive industry where technology is rapidly changing, the valuation models need to become more dynamic. Upon building a solid understanding of the fundamental methodologies, the course will survey extensions of the basic methodologies and alternative valuation models. It will also discuss how strategic issues interact with finance. Through these discussions, the students will form a dynamic view in project and corporate valuations.

MBA Elective Descriptions

209B. Investments
Foundations of investment management. Theory and empirical evidence related to portfolio theory, market efficiency, asset pricing models, factor models, and option pricing theory. Students are expected to combine market research results and electronic information sources to create optimal investment strategies. 

242. Portfolio Management
Advanced portfolio decision-making. Topics include index models, portfolio performance measures, bond portfolio management and interest immunization, stock market anomalies, and market efficiency.

243. Bonds and Fixed Income
Fixed-income markets include treasury bonds, corporate bonds, and asset-backed securities. Focuses on techniques and methodologies for valuing different types of debt as well as their uses.

244. Multinational Finance
Focuses on financial issues facing multinational corporations, the most important of which is the management of foreign exchange risk. Other topics include investments and financing decisions in international capital markets.

248. Corporate Valuation
Studies cases that expand concepts covered in the introductory corporate finance course and focuses on estimating the value of firms and projects in diverse settings.

249. Derivatives
Studies financial derivatives instruments, including forward contracts, futures, swaps, and options. Advanced applications of these instruments, including pricing and risk management, are emphasized.

290. Special Topics in Finance
Studies in selected areas of finance. Topics addressed vary each quarter. Past courses include: Risk Management, Venture Capital and Private Equity, Wealth Management, Trading Lab.

PhD Course Descriptions

291. PhD Sem-FIN
A special topics course. 

291-FN1. Advanced Topics in Corporate Finance (4 units)
The course helps students understand and develop their skills in analyzing, firms’ investment and financing decisions. It covers research topics in corporate finance to illustrate basic principles and to give students practice developing these skills. It examines a variety of topics, such as optimal debt and equity financing, managerial and firm reputation and investment decisions, motives for financial signaling, conflicts of interest and informational differences between managers, debtholders and equity-holders; the takeover process; the use of capital structure and compensation to strategically position the firm in product markets; and the significance of imperfect rationality for corporate policy. The style is a mixture of lecture and discussion. 

291-FN2. Advanced Topics in Investments (4 units)
The goal of this course is to give critical perspectives on the some of the most challenging problems related to investments, the problems that are most relevant for both academics and the applied world. It covers a variety of topics such as the basic asset pricing test framework, the common methodologies used in empirical asset pricing tests, empirical equity market regularities, and new directions in empirical finance. The idea of the course is not to go through in detail all of the assigned reading. It will be assumed that students have read each of the articles. The classroom discussion will be broad and will not necessarily focus on any technical details in the readings. We are more interested in extracting the big picture and what it means for the future of finance research.

291-FN3. Behavioral Finance (4 units)
Building upon traditional theories of investment choices and asset market equilibrium, this course examines how the psychology of investors and managers affects financing and investment choices. It reviews evidence from psychology that may be relevant for finance, relevant evidence from financial markets, and recent approaches to modeling how imperfect rationality affects financial markets. It covers recent research on how psychology influences the preferences and information processing of investors; how imperfect rationality and arbitrage interact to determine equilibrium asset prices; how firms can take advantage of market inefficiencies; and how psychological bias affects the behavior of managers. Our emphasis will be on approaches that reflect evidence or insight from the explicit study of human psychology. The course provides a preparation to take advantage of the rich set of opportunities for future research in this field.

291-FN4. Finance Research Methodology   (4 units)
This course offers a survey of recent advances in finance research methodologies. In particular, we will discuss the pros and cons of the different approaches and the motivations behind their model designs.

291-FN5. Current Topics in Finance (2 units)
Description: This course discusses recent advances in the finance literature. Participants are expected to: (1) Write summaries of papers covered in the class; (2) Present one paper; (3) Discuss one paper; (4) Develop a research proposal on an original research idea.

297V. Information, Psychology, and Social Processes
In the marketplace for ideas, which succeed and which fail? A growing field of research studies how ideas and information spread between individuals, and how populations of ideas evolve. This course reviews recent research in this area and applications to business. A few examples give a hint of the range of applications of these ideas: viral marketing, information cascades and herd behavior in consumer behavior and in corporate strategy, the spread of behaviors across firms through social networks such as interlocking boards of directors, and what determines the success of innovative business methods.