❗The content presented here is sourced directly from Coursera platform. For comprehensive course details, including enrollment information, simply click on the 'Go to class' link on our website.
Updated in [May 25th, 2023]
This course provides learners with an understanding of the fundamentals of asset and investment valuation, and how alternative valuation techniques can be used in practice. Learners will gain an understanding of the different approaches to valuation, such as discounted cash flow, relative valuation, and real options analysis. They will also learn how to apply these techniques to different types of investments, such as stocks, bonds, and derivatives. Additionally, learners will gain an understanding of the importance of risk management and portfolio optimization in the context of valuation and investment. Finally, learners will gain an understanding of the role of financial markets in the valuation and investment process.
[Applications]
Upon completion of this course, participants will be able to apply the alternative approaches to valuation and investment to their own work. They will be able to use the techniques to assess the value of assets and investments, and to make informed decisions about their own investments. Additionally, participants will be able to use the knowledge gained in this course to advise others on their investments.
[Career Paths]
1. Investment Analyst: Investment analysts are responsible for researching and analyzing financial data to make investment decisions. They must be able to interpret financial statements, analyze market trends, and understand the risks and rewards associated with different investments. As the financial markets become increasingly complex, the demand for investment analysts is expected to grow.
2. Financial Risk Manager: Financial risk managers are responsible for assessing and managing the financial risks associated with investments. They must be able to identify potential risks, develop strategies to mitigate them, and monitor the performance of investments. With the increasing complexity of the financial markets, the demand for financial risk managers is expected to grow.
3. Portfolio Manager: Portfolio managers are responsible for managing the investments of their clients. They must be able to analyze financial data, develop investment strategies, and monitor the performance of investments. As the financial markets become increasingly complex, the demand for portfolio managers is expected to grow.
4. Investment Banker: Investment bankers are responsible for providing financial advice to their clients. They must be able to analyze financial data, develop investment strategies, and advise their clients on the best course of action. With the increasing complexity of the financial markets, the demand for investment bankers is expected to grow.
[Education Paths]
1. Bachelor of Business Administration (BBA): This degree program provides students with a comprehensive understanding of business principles and practices, including accounting, finance, marketing, operations, and organizational behavior. It is an ideal choice for those interested in pursuing a career in corporate finance, as it provides a strong foundation in the fundamentals of business and finance. Additionally, the degree program is designed to prepare students for the ever-changing business environment, with a focus on developing the skills necessary to succeed in the corporate world.
2. Master of Science in Finance (MSF): This degree program is designed to provide students with a deeper understanding of the principles of finance, including financial analysis, portfolio management, and risk management. It is an ideal choice for those looking to specialize in corporate finance, as it provides a comprehensive overview of the field and the necessary skills to succeed in the industry. Additionally, the degree program is designed to prepare students for the ever-changing financial landscape, with a focus on developing the skills necessary to succeed in the corporate world.
3. Master of Business Administration (MBA): This degree program provides students with a comprehensive understanding of business principles and practices, including accounting, finance, marketing, operations, and organizational behavior. It is an ideal choice for those interested in pursuing a career in corporate finance, as it provides a strong foundation in the fundamentals of business and finance. Additionally, the degree program is designed to prepare students for the ever-changing business environment, with a focus on developing the skills necessary to succeed in the corporate world.
4. Master of Science in Investment Management (MSIM): This degree program is designed to provide students with a deeper understanding of the principles of investment management, including financial analysis, portfolio management, and risk management. It is an ideal choice for those looking to specialize in corporate finance, as it provides a comprehensive overview of the field and the necessary skills to succeed in the industry. Additionally, the degree program is designed to prepare students for the ever-changing financial landscape, with a focus on developing the skills necessary to succeed in the corporate world.
Course Syllabus
Defining Attitudes Towards and Alternative Measures of Risk
This week we will define a statistical measure of stand-alone risk as being the standard deviation of returns. We will describe three alternative attitudes towards risk, settling on risk aversion as being the standard assumption made in financial markets. We will then analyse the impact of combining assets into a portfolio upon both risk and return and then quantify the benefits from diversification by comparing performance against a suitable benchmark.Linking risk with expected return
This week we differentiate between systematic and unsystematic risk and explain how the expected returns that are reflected in the prices of assets should be linked to only one type of risk. We illustrate how the Capital Asset Pricing Model might be used to link systematic risk with expected return and then discuss the empirical shortcomings of the model. This leads to a description of more advanced models and we conclude with a review of survey evidence that considers the approach taken by finance mangers of large listed firms in practice. Using financial statement analysis to measure cost of capital
This week we will explain the logical underpinnings of the Weighted Average Cost of Capital Formula and show how it might be estimated in practice by a firm. We will also consider the many challenges that might be faced in using this approach to estimating hurdle rates and conclude with a warning about the perverse outcomes that might occur if the technique is used in a haphazard manner.Addressing financial reality with real options analysis
This week we describe how standard NPV analysis might lead to incorrect decisions when we fail to account for the impact of (or upon) firm flexibility. We then describe the three most common types of real options that firms face in practice and then explain how decision trees might be used to arrive at an approximation of the value of the real option that is embedded within a project. We conclude by considering empirical evidence on the take-up of real options analysis and discuss the situations in which real options analysis might most be needed.
