FIN10 Introductory Applied Finance

• Topics

  Introductory Applied Finance course combines core finance concepts with hands-on financial modeling in Excel. Students apply theory to real-world problems and gain practical experience, including an introduction to Visual Basic for Applications (VBA).

  Topics covered:

  • Time value of money (including Net Present Value, Internal Rate of Return)
  • Bond pricing (including Yield To Maturity, duration, term structure of interest rates)
  • Equity valuation (including Weighted Average Cost of Capital, Discounted Cash Flow model, multiples)
  • Portfolio theory (including diversification, efficient frontier, Capital Asset Pricing Model)
  • Style analysis (risk factors, skill vs luck in performance)
  • Event studies
  • Value at Risk (including GARCH)
  • Option pricing (including the binomial model, delta hedging, Black-Scholes model)
  • Forecasting (including Receiver Operating Characteristic curve)

  Some of the real-world problems examined are related to sustainability. For example, ESG portfolio analysis, green bond pricing, assessment of the market reaction to announcements of green initiatives.

• Learning outcome

  Knowledge

  On successful completion of the course, students:

  • Understand the relationship between financial theory and its application to real-world data.
  • Know core quantitative methods used in empirical finance, including valuation, portfolio analysis, risk measurement, and forecasting.
  • Understand the role of assumptions, data limitations, and model choice in applied financial analysis.
  • Understand how spreadsheet-based tools, including VBA, are used in professional financial modelling and analysis.

  Skills

  Students can:

  • Conduct, interpret, and critically assess the output of financial analyses.
  • Answer applied finance questions by using suitable empirical methods.
  • Use Excel tools (including Solver, regression, and VBA) to automate calculations and perform scenario and sensitivity analyses.

  General Competences

  Students:

  • Learn to interpret numerical results in an economically meaningful way.
  • Clearly communicate quantitative findings in written form.
  • Gain experience working independently and in groups.

• Teaching

  The course offers lectures and lab sessions in which students learn to use Excel for financial data analysis. Each week, the course meets on campus for a three-hour session. Every session consists of:

  • A one-hour lecture introducing the theoretical background of a new topic.
  • A two-hour lab session applying the introduced theory to real-world data using Excel.

  Solutions to the lab-session exercises will be published on Canvas after the session.

• Recommended prerequisites

  None.

• Credit reduction due to overlap

  None.

• Compulsory Activity

  Each student is required to submit three short reports (no more than one single-spaced A4 page each) based on three lab sessions of their choice. Each report should summarize the question addressed, the methods used, the results obtained, and should provide a critical assessment of the limitations of the practical exercise. The deadline for submitting all reports is the beginning of the final course meeting.

  Previously approved compulsory activities (work requirements) are valid.

• Assessment

  Two-hour digital school exam in English with access to Excel.

• Grading Scale

  Grading scale A - F

• Computer tools

  Students need laptops with installed Excel.

• Literature

  Lecture notes with Excel spreadsheets will be provided. If students wish to take their reading to the next level, the following textbook is recommended:

  Benninga, S., 2008, Financial Modeling MIT Press, third or more recent edition, 2008.

• Permitted Support Material

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 https://www.nhh.no/globalassets/for-studenter/forskrifter/supplementary-provisions-to-the-regulations-for-full-time-study-programes-at-nhh_140126.pdfPermitted support material

  https://www.nhh.no/en/for-students/examinations/examination-support-materials/

• Retake

  Retake in FIN10 will not be offered during the non-teaching semester (autumn). Only mandatory bachelor courses with an individual written school exam or a home exam lasting up to one day will have a retake assessment in the non-teaching semester.

  For detailed information regarding the retake policy, please visit our website: https://www.nhh.no/en/for-students/examinations/retake-of-exams (copy URL)