Detailed Curriculum
Master of Finance
2014 – 2015
Master of Finance - 2014-2015
DETAILED CURRICULUM
CONTENTS
Contents .................................................................................................................................................. 2
Detailed Curriculum - Master of Finance 2014-2015 ......................................................................... 3
1.
Computer Applications in Finance: Marc De Ceuster, Hairui Zhang Credits: 4 ................ 4
2.
Empirical Research in Finance: Jan Annaert Credits: 6 ...................................................... 4
3.
Case Seminar in Corporate Finance: Johan Smith Credits: 6 ............................................. 5
4.
Global Financial Markets I, II: Marc De Ceuster Credits: 6 ................................................. 6
5.
Advanced Investment Analysis: Jan Annaert Credits: 6 ...................................................... 6
6.
Advanced Financial Risk Management: Marc De Ceuster Credits: 4................................. 6
7.
Raising Capital and Investing in Global Financial Markets: Marc Deloof Credits: 6 ..... 7
8.
Real Estate Finance : Marc De Ceuster Credits: 3 ................................................................. 7
9.
Contemporary Issues in Global Finance: Marc De Ceuster, Hairui Zhang Credits: 4....... 8
10.
Master Project: Marc De Ceuster, Jan Annaert Credits: 15 ............................................... 8
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Detailed Curriculum - Master of Finance 2014-2015
Subject
Lecturer
1
Computer Applications in Finance
Marc De Ceuster/Hairui Zhang 4
2
Empirical Research in Finance
Jan Annaert
6
3
Case Seminar in Corporate Finance
Johan Smith
6
4
Global Financial Markets I, II
Marc De Ceuster
6
5
Advanced Investment Analysis
Jan Annaert
6
6
Advanced Financial Risk Management
Marc De Ceuster
4
7
Raising Capital and Investing in Global Financial Markets Marc Deloof
6
8
Real Estate Finance
Marc De Ceuster
3
9
Contemporary Issues in Global Finance
Marc De Ceuster/Hairui Zhang 4
10 Master Project
Credits
Marc De Ceuster, Jan Annaert
Total
15
60
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1. Computer Applications in Finance: Marc De Ceuster, Hairui Zhang
Credits: 4
In this course, we assume that the students already have a basic knowledge of EXCEL™. We will
discuss somewhat more advanced EXCEL™ functionalities such as the use of data tables, the
analysis tool pack, the solver, matrix commands, etc. Then we will focus on writing macros and
functions using VBA.
2. Empirical Research in Finance: Jan Annaert
Credits: 6
In this course we introduce empirical research methods frequently used in finance. In contrast
to many other economic fields, financial economics has the advantage that it can draw upon
abundant high quality data, usually at high frequencies (daily, or even intra-daily). This not only
puts a heavy burden on theoretical models, which can be at variance with the data they are
supposed to explain, but also on empirical researchers – or simply anyone interested in
discovering patterns and relations between financial data series. Indeed, many new and
advanced econometric techniques and models have been introduced to properly account for the
stylized facts of financial return data – fat tails (extreme returns are more frequent than for a
normal distribution), time-varying volatility (“heteroscedasticity”) and correlation, clustering of
volatility (periods of high or low volatility tend to cluster in time), and limited return
predictability. As a result, financial econometrics has become a respected subfield of
econometrics. It has been highly successful in several respects, culminating in the awarding of
the Nobel Prize in Economics to Robert Engle (US, New York University) and Clive Granger (UK,
University of California at San Diego) in 2003 for methods of analyzing economic time series
with time-varying volatility (ARCH) and common trends (cointegration). The impact has not
only been felt at the academic level,1 but also in practice, with both financial practices and
financial regulation becoming increasingly based on quantitative techniques.
It is therefore crucial that anyone planning a career in a financial environment at least
understands the language of empirical finance and has some insight into the main tools
employed. The main objective of this course is thus to introduce the student to the most
commonly used statistical, econometric and methodological apparatus. We will assume that she
has some background in statistics and portfolio theory, although the course tries to be selfcontained. In addition, high-school algebra and matrix calculus may also be used.
Of course, becoming acquainted with these topics also assumes some implementation.
Therefore, students will be required to work with financial data, both individually and in group.
To this end, we will start by using Excel, but we will quickly move to Gretl, an interactive,
window-driven econometric software package that can handle the more elaborate techniques
more efficiently. This is a free open source package that can be downloaded from
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http://gretl.sourceforge.net/. Both a Windows and a Mac version are available. Students are
strongly advised to install the most recent version on their portables when coming to class. We will
have ample opportunity to practice.
It goes without saying that this course draws heavily upon the skills learned in the course
“Computer Applications in Finance”, taught by Prof. Dr. Marc De Ceuster. Overlaps will hopefully
be minimized, but spill-over effects are actively sought. So keep yourself up-to-date with both
courses! Moreover, especially in the second semester the courses “Advanced Investment
Analysis” and “Advanced Financial Risk Management” as well as your master thesis will
intensively hark back to these two first-semester courses. You should therefore aim for longterm mastering of the concepts.
3. Case Seminar in Corporate Finance: Johan Smith
Credits: 6
Corporate Finance focuses on how a company can create and maintain value by taking
investment and financing decisions. In this course we will study the main aspects of financial
management by using a case study approach. A number of exercises and case studies will be
analyzed and discussed to show how specific techniques and decision rules can be used to help
maximize the firm's value.
This course uses a case study approach to simulate how these value enhancing decisions can and
should be made in practice.
The emphasis is on applying the theory and how it relates to practice.
The topics covered in this course are:

financial planning
o the use and limitations of historic financial statements,
o sustainable growth and financing needs
 capital investment analysis,
o the impact of profitability, cash flow and risk analysis
 cost of capital,
o appropriate financial instruments & capital structure policy
 company valuation,
o value drivers and valuation techniques
The purpose of this course is:



to gain insight into the core concepts and techniques to be used in managing with a view
to enhancing value
to enhance the ability to understand and to discuss financial decision-making
processes in the context of financial markets and competition
to focus on the practice of corporate finance
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4. Global Financial Markets I, II: Marc De Ceuster
Credits: 6
This course is intended as an introduction to Global Financial Markets. We will discuss the
instruments traded in the markets, the institutions that support and frame the markets, the
trading mechanisms and the regulator structure. The course is intended to be primarily
descriptive and conceptual although we also aim to introduce the principles of the pricing of the
instruments. The aim is to familiarize you with the breadth and scope of equity, debt, and
derivatives markets.
5. Advanced Investment Analysis: Jan Annaert
Credits: 6
This course is about investment analysis and management. Since the seminal publication of
Harry Markowitz’s optimal portfolio in the 1950s investment management has become
increasingly quantitative in nature. Of course the abundance of the available data has
contributed to this evolution. The purpose of this course is to introduce students to these
quantitative management techniques. In doing so, we will stress practical implementation
issues, without sacrificing academic rigour, however. It goes without saying that we will rely
strongly on econometric and statistical techniques that have been introduced in the
accompanying course “empirical research in finance”. We adopt some kind of top-down
approach. We start by discussing the general portfolio management decisions. We also look at
implementing strategic or long term asset allocation using Markowitz’s single period meanvariance (MV) model. Attention is drawn to the problem of estimating model’s input parameters
and the issues of applying the model in a long term setting. Secondly we move to tactical asset
allocation, where the portfolio composition is actively shifted between stocks and bonds. We
link tactical asset allocation strategies to the empirical literature on time-series predictability of
financial returns. There is also strong debate about the cross-sectional predictability of stock
returns. We study this in the third part, where we concentrate on security selection models. We
introduce management techniques showing how active positions can optimally be combined
with a passive benchmark portfolio. In this part we also discuss different models that can
provide estimates of active return for individual securities. The final part considers the
performance evaluation models, where we explicitly allow for active portfolio strategies.
Throughout the course, we try to illustrate the techniques using examples from both the equity
and the fixed income markets.
6. Advanced Financial Risk Management: Marc De Ceuster
Credits: 4
To a large extent, we will follow John Hull’s classic book. We start with pricing and hedging
through forward and futures markets. Next we discuss standard option pricing theory. Options
will be priced both in discrete and in continuous time. Special attention will be given to the
treatment of dividends. Exotic options will be discussed in relation to the construction of mutual
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funds. Numerical techniques such as lattices, finite difference methods and Monte Carlo
simulation will be explored. Students should understand, explain and implement fundamentals
valuation models. They should also understand how derivatives can be used in hedging risk
exposures.
7. Raising Capital and Investing in Global Financial Markets: Marc Deloof
Credits: 6
In this course we will examine issues in corporate finance and corporate governance that are of
particular interest to external fund providers. Corporate finance decisions will be studied not
from the point of view of the company, but with a focus on the external sources of funding:
implications for stockholders, bondholders, banks. The emphasis is on funding provided through
financial markets.
The topics covered are:
 Basics of IPOs
 Valuation and pricing of initial public offerings
 Corporate Restructuring (spin-offs, carve-outs, asset sell-offs, tracking stock, exchange
offers, and debt restructuring)
 Mergers & Acquisitions
 Corporate governance
 Conflicts of interest between controlling and non-controlling shareholders
8. Real Estate Finance : Marc De Ceuster
Credits: 3
This course develops two themes. First we discuss various valuation tools for real estate
objects. We cover the direct sales approach, the cost approach and various income approaches.
Based on Lusht (2001) and various academic papers, students are challenged to apply finance
ideas that were discussed during the year to real estate. Special attention will go to ‘real option’
theory. Second, we also devote attention to real estate portfolio management.
After a general introduction, the course will be taught as a seminar in which students have to
make presentations.
Course Material


Lusht, K.M. (2001), Real Estate Valuation: Principles and Applications, pp. 480
(compulsory)
Brown, G.R. and G.A. Matysiak, 2000, Real Estate Investment: A Capital Market Approach,
Financial Times, Prentice Hall (recommended)
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9. Contemporary Issues in Global Finance: Marc De Ceuster/Hairui Zhang
Credits: 4
Though the class is titled ‘Issues in Contemporary Finance’, history often repeats itself. The
details might be different, but common themes are repeated. This course discusses two recent
events: the financial crisis of 2009 (including the regulatory tsunami it caused) and the
European debt crisis. By the end of the course, we should be able to answer the follow questions:
(1) how did these issue arise, (2) how is (did) the issue play out, (3) what was (is being) done
about the issue, and (4) what lessons should we learn
10. Master Project: Marc De Ceuster, Jan Annaert
Credits: 15
Our integrative approach culminates in the Master Thesis. In teams, the students will have to
demonstrate that they are capable of solving financial problems. The thesis will start from a
practical problem statement. The students will have to identify and formulate the research
question, gather (and clean) the data and perform the analysis needed in order to answer the
research questions. The thesis will have to be presented/defended.
This curriculum uses the latest information available at the time of publication and is subject to
change at any time.
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