INTRODUCTION TO THE THEORY OF FINANCE

ECO374

Course Code: ECO374
Semester: -
Theory+Practice: 3 + 0
ECTS: 5

Course Type

Elective Course

Course Level

Bachelor's Degree

Year of Study

Semester

ECTS

Name of Lecturer(s)

Learning Outcomes

At the end of this course, the students;

Understand the financial system, fundamental financial concepts, and instruments.
Interpret and analyze financial data.
Evaluate risk and return in financial investments.
Apply Excel to solve finance problems (NPV, Beta estimation, portfolio analysis).

Mode of Delivery

Face to face

Prerequisites

Recommended Optional Programme Components

None

Course Description

This course provides an introduction to the theory of finance, equipping students with the concepts, tools, and analytical techniques needed to understand financial markets and make informed investment decisions. Students learn about financial instruments, valuation models, risk and return while also gaining practical skills through applications.

Course Contents

WEEK	TOPICS
1^st Week	Overview of course structure. Introduction to financial markets, instruments and institutions.
2^nd Week	Time Value of Money (with applications)
3^rd Week	Interest Rates (with applications)
4^th Week	Financial instruments (Money and capital markets, equity vs. debt, derivatives)
5^th Week	Bond Valuation Models
6^th Week	Stock Valuation Models
7^th Week	Midterm
8^th Week	Risk and Return I (Portfolio theory basics)
9^th Week	Risk and Return II (Capital Asset Pricing Model, Arbitrage Pricing Model)
10^th Week	Strategic Investment Decisions, Cost-Benefit Analysis Fundamentals
11^th Week	Applications in Excel I (Data sources and gathering, applications: CBA, CAPM /APT examples)
12^th Week	Applications in Excel II (CBA, CAPM /APT examples)
13^th Week	Applications -hands-on practice
14^th Week	Applications -hands-on practice

Recommended or Required Reading

Cornett, Adair, Nofsinger, ?Finance, Applications and Theory?, The McGraw-Hill.
Copeland, Weston, Kuldeep, Shastri (2014), ?Financial Theory and Corporate Policy?, Pearson.
Boardman, Greenberg, Vining, Weimer (2001), ?Cost-Benefit Analysis: Concepts and Practice?
Szulczyk (2014), ?Money, Banking and International Finance?

Planned Learning Activities and Teaching Methods

Lecture
Discussion
Other

Assessment Methods and Criteria

	Quantity	Percentage (%)
Mid-term	1	30
Assignment	1	30
Total(%)		60
Contribution of In-term Studies to Overall Grade(%)		60
Contribution of Final Examination to Overall Grade(%)		40
Total(%)		100

ECTS Allocated Based on Student Workload

Activities	Quantity	Duration (Hour)	Total Workload (Hour)
Midterm exam	1	2	2
Preparation for Quiz	0	0	0
Individual or group work	14	3	42
Preparation for Final exam	1	20	20
Course hours	14	3	42
Preparation for Midterm exam	1	20	20
Laboratory (including preparation)	5	4	20
Final exam	1	2	2
Homework	1	1	1
Total Work Load			149
Total Work Load / 30 (h)			4.96
ECTS Credit of the Course			5

Language of Instruction

English

Work Placement(s)

Programme Qualifications / Learning Outcomes

	LO1	LO2	LO3	LO4
K1	X
K2
K3	X	X
K4			X
K5				X
K6
K7
K8
K9	X	X
K10				X
K11
K12
K13