FIN 320f: Foundations of Finance, Spring 2008
Unique# 02870: MWF 10:00 – 11:00, UTC 2.102A
Unique# 02875: MWF 11:00 – 12:00, UTC 2.102A
Section 1. Objective
Welcome to Foundations of Finance! The purpose of this course is to help you develop a basic understanding of Finance concepts and learn how to apply these concepts in both your work and personal lives. The course is divided into four discrete sections: (1) financial instruments and the markets in which they are traded, (2) financial reporting and analysis, (3) the time-value of money, and (4) the fundamentals of personal finance.
Section 2. Contact Information
Professor: Heidi Toprac
Office: GSB 4.126C
Office Hours: Mondays and Wednesdays 12:00noon to 1:30pm, and by appointment
via telephone or email.
TA: Jared Schroeder
Office: CBA 4.304A
Office Hours: To be announced
TA: Adam Williams
Office: CBA 4.304A
Office Hours: To be announced
Your TAs are a wonderful source of help on your homework assignments, end-of-chapter problems, and so on. They can also provide excellent guidance regarding how to use Excel. Section 3. Prerequisites
To remain registered for this course, you must have successfully completed ACC 310f (or ACC 311 and 312), as well as MIS 311f (or STA 309). Students lacking these prerequisites will be dropped from the course. FIN 320f may not be taken pass/fail if you are seeking the Business Foundations Certificate at graduation. For more information, refer to the Foundations website: www.mccombs.utexas.edu/udean/major/foundations/.
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Section 4. Tools & Materials
Text: In an attempt to reduce both cost and bulk, we’ll be using a looseleaf, custom text,
entitled Foundations of Finance - FIN 320F: Customized for The University of Texas rdat Austin, 3rd Edition. It contains several chapters from the 3 edition of Principles
of Finance, by Scott Besley and Eugene Brigham, plus chapters 9 and 13 from the nd2 edition of the same book. You might want to insert it in a 3-ring-notebook. You
can obtain it in several ways: First, you can go buy a used copy at Beat the
Bookstore (located in Dobie Mall). Second, you can buy a new copy directly from
the publisher. To do so, click on the following link, or cut-and-paste it into your
browser: http://ecatalog.cengage.com/150l/ . Enter the number 0324345658 in the
search box on the upper right. That number is the book’s International Standard
Book Number (ISBN). It costs $71.25 plus shipping. You’ll receive it in 3-4 days. rdYour third option is to buy a used or new copy of the 3 edition of the actual
hardcover book from Amazon.com or any other bookseller, and borrow chapters 9 ndand 13 of the 2 edition from a classmate.
Handouts: Periodically, articles from the financial press will be distributed during class, in
hardcopy form only. These articles are intended to augment your learning experience,
and help ensure that the course materials are current and relevant. I will print them on
three-hole-punched paper to facilitate using a 3-ring-notebook. I will place extras in the
rack that’s hanging on the wall right outside my office door.
Calculator: Please bring a calculator to class each day. Although any calculator that can handle
exponents and square roots will suffice, a calculator with financial functions (eg.
INT, PV, PMT, IRR) can be very helpful—as long as you know how to use it. You
may not use a cell phone as a calculator during exams.
Blackboard: Lecture slides, problem sets distributed in class (and their solutions), homework
assignments (and their solutions), solutions to the end-of-chapter problems, and other
great stuff will be posted on Blackboard. In addition, please check the
―Announcements‖ on Blackboard each week for any changes to the syllabus, updates
on exam schedules, and so on.
E-gradebook: All of your grades—homework, exams, extra credit—will be posted on e-gradebook.
Scantron data can be automatically uploaded into e-gradebook, making it the
speediest, most efficient way for you to see your scores.
Email: From time to time, I may need to email you. The communications policy in the
General Information Catalog states: "Electronic mail (e-mail), like postal mail, is a
mechanism for official University communication to students. The University will
exercise the right to send e-mail communications to all students, and the University
will expect that e-mail communications will be received and read in a timely
manner." Enough said.
Software: All lecture slides will be prepared using PowerPoint. You must use Word to prepare
Homework 1 and 2. You must use Excel to prepare Homework 3 and 4. As
mentioned earlier, if you have any concerns about your proficiency with Excel,
please ask one of your TAs for help.
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Section 5. Grades
Your final grade in the course will depend on the homework and exam scores recorded in e-gradebook as of 5:00pm on the last class day of the semester. If you suspect an error in grading a particular exam or homework assignment, contact me within 48 hours of the time the grade was posted (or should have been posted). Given the size of this class, if you wait more than 48 hours to address a grading problem, I cannot promise that it will be corrected before I submit your final grade. Final grades will be determined as follows:
; The average of your four homework percentage scores will be multiplied by 40%. ; The average of your four highest exam percentage scores will be multiplied by 60%.
; The sum of these two scores will determine your final grade.
Final grades are standards based, rather than norms based, so there is no need for an artificial curve. If you demonstrate mastery of at least 90% of the course material, as calculated above, you will earn an ―A‖. An overall course score of 80-89% will earn a ―B‖; a score of 70-79% will earn a ―C‖; a
score of 60-69% will earn a ―D‖. A ―D‖ is the lowest passing grade.
Section 6. Examinations
The exams in this course are designed to measure how well you have synthesized the concepts learned in class. There will be four in-class exams—one for each section of the course. Each will
be non-comprehensive; that is, each will cover only the material related to that section. In addition, there will be an optional final exam during the final exam period. The final exam will be comprehensive; that is, it will cover material from the entire semester.
Each exam will have 25 multiple-choice questions. Everything in your text and everything distributed and discussed in class (including handouts, films, and presentations by guest speakers) is subject to examination. Bring your pencils, calculator and picture identification to each exam. There will be a formula sheet attached to each exam, so you need not bring your own. You may not use a cell phone, i-pod, or any other electronic devices during an exam.
You must take four exams to pass the course. If you miss an exam—because of illness, family
issues, a funeral, a job interview, a sporting event, etc.—the final exam will serve as your make-up
exam. The comprehensive final exam is the one and only make-up exam. The lowest of your five exam scores will be dropped when computing your final grade. At the end of the semester, if you are satisfied with your first four exam scores and your homework scores, you can skip the final exam.
Important note: The final exam will be a uniform final; that is, students from both sections will be taking the final exam together. These uniform finals are not scheduled by the Registrar until very late in the semester—usually three weeks before the last class day. The Registrar will use the letter ―u‖ to indicate that it is a uniform final. As soon as the Registrar schedules our uniform final, I will announce the time and date on Blackboard and in class. The Registrar will also report another exam time, and will use the letter ―m‖ to indicate that it is a make-up final. The make-up is only for
students who have another final exam at the same time as our uniform final. The make-up final is not for students who have already purchased plane tickets, scheduled a job interview, or planned any other sort of event that conflicts with the uniform final exam. I cannot make any exceptions; please don’t ask me.
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Section 7. Homework
The homework assignments in this class are designed to enable you to apply the concepts you’ve learned in class to authentic, Finance-related events, and then reflect on how these concepts affect you personally.
There will be four homework assignments—one for each section of the course. Each assignment is
worth ten percent of your final grade. Since homework is such an important part of your grade, we don’t want it to be mistakenly counted late, or, worse yet, lost. Luckily, we can use Blackboard as both timekeeper and backup plan. Thus, to obtain credit for your homework, you must submit both an electronic copy and an identical printed copy, as follows: (1) Submit an electronic copy of your completed assignment (in Word or Excel, depending on the assignment) to Blackboard prior to the start of class on the day the assignment is due. (2) Print the file(s) that you submitted to Blackboard and turn in the printed copy at the start of class on the day the assignment is due. Since the paper copy is the printout of a Word or Excel file, it follows that no handwritten homework will be accepted. Ensure that your name, UTEID and unique number are recorded on each page of your homework. Multiple pages must be stapled together. Your TAs and I can’t grade your homework
unless we receive a hardcopy (since we can’t use UT resources to print it for you). If you can’t
make it to class, submit your paper copy to the Finance department office, CBA 6.222. If there are any disputes or discrepancies regarding homework submission, the time stamp and data on the electronic copy on Blackboard will prevail.
You will have at least one week to prepare and submit each homework assignment. Your homework scores will be posted in e-gradebook, and your graded copy will be returned to you during class, on the dates indicated on the syllabus. Thereafter, the solutions will be posted on Blackboard. (Remember the 48-hour rule in Section 5, above.)
Homework will be considered on-time if it is submitted within the first 15 minutes of class on the due date. Homework is late if it is submitted after the first 15 minutes of class on the due date. Four points (out of 10 possible points) will be deducted from late homework. Thus, the highest score that can be earned by late homework is a ―D.‖ No homework will be accepted after 5:00pm
on the due date. Please remember that even if you submit an assignment on Blackboard (whether on-time or late), we still need a printed copy in order to grade it.
Because all homework solutions will be posted online (to enable students to prepare for each exam), there will be no opportunities to ―make up‖ late homework. Let me repeat that: There are no make-
up opportunities for missed homework assignments.
From time to time, extra credit opportunities may be announced during class. These opportunities will be available only to those students who attend class on the day(s) of the announcement(s). Section 8. Academic Integrity
The McCombs School of Business has no tolerance for acts of scholastic dishonesty. If you copy an author’s or website’s words into your homework without appropriate references, it will be
considered plagiarism. Further, although it is perfectly acceptable to work in groups, you must create and submit your own individual Word and Excel files. Work that is copied will earn a score of zero. Further, the student(s) involved will be subject to other penalties.
By teaching this course, I have agreed to observe all the faculty responsibilities described in the policy on scholastic dishonesty. By enrolling in this class, you have agreed to observe all the student responsibilities described in the policy on scholastic dishonesty. Students who violate 69294196.doc Page 4 of 7
University rules on scholastic dishonesty are subject to disciplinary penalties, including the
possibility of failure in the course and/or dismissal from the University. Refer to Student Judicial
Services at http://deanofstudents.utexas.edu/sjs/ or the General Information Catalog to access the
official University policies and procedures on scholastic dishonesty as well as further elaboration
on what constitutes scholastic dishonesty.
Section 9. Students with Disabilities
The University of Texas at Austin provides upon request appropriate academic accommodations for
qualified students with disabilities. For more information, contact the Office of the Dean of
Students at 471-6259, 471-4641 TTY.
Section 10. Class Schedule
Any changes to this schedule will be communicated during class and announced on Blackboard.
Items in italics are available on Blackboard.
Day Date Class Topic Readings & Problems
Mon Jan 14 Introduction, Pre-Test & Read the Syllabus
Wed Jan 16 Introduction to Section I; Read Ch 2; Do Questions 2-1 & 2-2; Self-
Chapter 2 Part 1: Financial Test Problem ST-1 (a-c, e, g-m, o-p & r only);
Instruments Problem 2-2; Exam-Type Problem 2-7 (a & b)
Fri Jan 18 Chapter 2 Part 2: Financial Do Ch 2 Integrative Problem 2-9
Mon Jan 21 MLK Day: No Class
Wed Jan 23 Chapter 3: Financial Markets Read Ch 3; Do Questions 3-1, 3-4, 3-6, 3-7,
3-8 3-9 & 3-10; Self-Test Problem ST-1 (skip
f); Problems 3-4, 3-5; Integrative Problem 3-9
Fri Jan 25 Chapter 4 Part 1: Financial Read Ch 4, pgs 87-102; Do Questions 4-1, 4-
Market Participants 2, 4-3, 4-5; Self-Test Problem ST-1 (a-d only)
Hmwk 1 available on Blackboard
Mon Jan 28 Film: The Stock Exchange thWed Jan 30 Chapter 4 Part 2: Mutual Funds Note: 12 class day
Fri Feb 1 Chapter 4 Part 3: The Federal Read Ch 4, pgs 106-109; Do Question 4-9,
Reserve Self-Test Problem ST-1 (h & i only), ST-2;
Integrative Problem 4-10 Homework 1 Due
Mon Feb 4 Chapter 5 Part 1: Financial Read Ch 5, pgs 120-124; Do Question 5-1;
Returns Problem 5-1; Exam-Type Problems 5-5 & 5-6
Problem Set 1: Chipotle
Wed Feb 6 Chapter 5 Part 2: Interest Rates Read Ch 5, pgs 127-132 and 139-142; Do
Questions 5-3 & 5-6; Self Test Problem ST-1
(c-g) & ST-3; Integrative Problem 5-10 (a-d)
Fri Feb 8 Review for Exam 1
Homework 1 Returned
Mon Feb 11 Exam 1 Note: Last day to drop a class
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Day Date Class Topic Readings & Problems Wed Feb 13 Introduction to Section II; Read Ch 7 pgs 185-195; Do Questions 7-1, 7-
Ch 7 Part 1: The Balance Sheet 2, 7-3 & 7-9; Self-Test Problem ST-1 (a-d
Problem Set 1: The Balance Sheet only); Exam-Type Problem 7-12 Fri Feb 15 Ch 7 Part 2: The Income Stmt
Problem Set 2: The Income Stmt
Mon Feb 18 Chapter 8: Forecasting Read Ch 8 pgs 228-238; Do Questions 8-1 &
Problem Set 3: Forecasting 8-9; Self-Test Problem ST-1 (a-d only)
Hmwk 2 available on Blackboard
Wed Feb 20 Chapter 7 Part 3: Ratio Analysis Read Ch 7 pgs 196-214, plus Ch 15 pgs 576-
579; Do Questions 7-4, 7-5, 7-6, 7-7, 7-8 & 7-
10; Self-Test Problem ST-1 (e-l); Problems 7-
1, 7-2, 7-5, Integrative Problem 7-14 Fri Feb 22 Chapter 7 Part 4: Add’l Analysis
Problem Set 4: Analysis
Mon Feb 25 Chapter 6 Part 1: Business Read Ch 6 pgs 148-168; Do Questions 6-1, 6-
Organization 3, 6-5, 6-6, 6-7 & 6-8; Self-Test Problem ST-
1 (a-l only) Homework 2 Due
Wed Feb 27 Chapter 6 Part 2: Taxes Read Ch 6 pgs 169-178; Do Questions 6-10,
Problem Set 5: Taxes 6-11, 6-12 & 6-13; Self-Test Problems ST-1
(m-q only) & ST-2; Problems 6-1, 6-2 & 6-4;
Exam-Type Problems 6-7, 6-8 & 6-10;
Integrative Problems 6-11 & 6-12 Fri Feb 29 Review for Exam 2
Homework 2 Returned
Mon Mar 3 Exam 2
Wed Mar 5 Introduction to Section III; Read Ch 9 pgs 283-298; Do Self-Test
Chapter 9 Part 1: Lump Sums Problem ST-2; Problems 9-1, 9-2, 9-3, 9-8 &
9-9; Exam-Type Problem 9-18 Fri Mar 7 Super Bonus Day: No Class
Mon Mar 10 Spring Break: No Class
Wed Mar 12 Spring Break: No Class
Fri Mar 14 Spring Break: No Class
Mon Mar 17 Problem Set 1: Lump Sums
Wed Mar 19 Chapter 9 Part 2: Annuities Read Ch 9 pgs 298-324; Do Self-Test Probs
ST-1, ST-3 & ST-4 (skip f-h); Problems 9-4,
9-5, 9-6, 9-7, 9-10, 9-11 & 9-12; Exam-Type
Problems 9-19, 9-22, 9-24, 9-25 & 9-27;
Integrative Problem 9-31 (skip l-o) Fri Mar 21 Problem Set 2: Annuities
Hmwk 3 available on Blackboard
Mon Mar 24 Problem Set 3: Amortization
Tables (and tips on using Excel)
Wed Mar 26 Chapter 13 Part 1: Capital Read Ch 13 pgs 473-488; Do Question 13-5
Budgeting & 13-8; Self Test Problem ST-1 (a-h only) 69294196.doc Page 6 of 7
Day Date Class Topic Readings & Problems Fri Mar 28 Problem Set 4: Capital Projects
Mon Mar 31 Problem Set 5: Lease vs. Buy
Homework 3 Due
Wed Apr 2 Chapter 13 Part 2: Other Read Ch 13 pgs 488-501; Do Question 13-2 ;
Evaluation Methods Self-Test Problems ST-1 (i, k, l, n, o only) &
Problem Set 6: NPV vs Payback ST-2 (a-c only); Problem 13-1 (a-b only);
Exam-Type Problems 13-10 & 13-12;
Integrative Problem 13-19 (skip i-k) Fri Apr 4 Review for Exam 3
Return Homework 3
Mon Apr 7 Exam 3
Wed Apr 9 Introduction to Section IV;
Step 1: Establish Objectives
Fri Apr 11 Step 2: Deal with risk
Mon Apr 14 Steps 3 & 4: Select investments
Hmwk 4 available on Blackboard
Wed Apr 16 Step 5: Take the plunge Read Ch 16 pgs 617-629; Do Questions 16-3,
16-4 & 16-5; Self-Test Problem ST-1 (a-h
only); Integrative Problem 16-15 (a-f only) Fri Apr 18 Problem Set 1: Make choices
Mon Apr 21 Step 6: Monitor performance Read Ch 16 pgs 630-648; Do Question 16-2,
16-6, 16-7, 16-8, 16-9, 16-12, 16-13 & 16-14; Homework 4 Due
Self-Test Problems ST-1 (i, j, k and m) &
ST-3; Problems 16-1, 16-2, 16-3, 16-4, 16-5
& 16-8; Exam-Type Problems 16-13, & 16-
14; Integrative Problem 16-15 (g, h, i only) Wed Apr 23 Guest speaker (date is tentative)
Fri Apr 25 Problem Set 2: Monitor
Mon Apr 28 Film: Can You Afford to Retire?
Wed Apr 30 Review for Exam 4
Homework 4 Returned
Fri May 2 Exam 4 Note: Last class day (Whoo-hoo!!!)
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