Dr. P.V. Viswanath



Economics/Finance on the Web
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Frequently Asked Questions

FIN 647: Advanced Financial Analysis



Q. What will the format of the exams and what chapters will they cover?
A. Usually, each exam will have at least one media article with questions (look at the Media Articles link from the FIN 647 class website). There will be some short questions. There will be no definitions. For the midterm, there will probably be quantitative questions from the following topics: valuation, cashflow estimation, asset pricing models and financial statements. For the final exam, the quantitative questions will be on capital structure and dividend policy. More information on the format of the exams will be given in class. You can also look at past exams, particularly the more recent ones.

This year, the midterm will cover chapters 2 through 7, and will have four questions -- one will consists of questions posed in the context of a newspaper article; the second will be about interpreting a beta estimation regression; the third is about computing bottom-up betas, while the fourth consists of short questions.

The final will cover 16-19 and 21. It will consist of several questions. One will be a media article question covering a newspaper/magazine article on Capital Structure or Dividend Policy. There will one question, consisting of several conceptual problems (probably non-quantitative) on Capital Structure or Dividend Policy,which you will have to answer in brief. There will be a quantitative problem requiring you to compute the optimal capital structure of a firm. There will be no "definition" questions. Here are two other kinds of questions that I might ask:

  • I will give you a description of a firm (maybe from finance.yahoo.com) and ask you to explain what sort of leverage that firm should have.
  • You will be asked to prescribe the dividend policy for a firm, given qualititative information about the firm and/or enough information allowing you to compute the firm's Free Cash Flow to Equity.

Q. Are the exams open book or closed book?
Ans. Click here for more information.

Q. Can I do extra work to improve my grade?
Ans. Sorry. I believe that in order to be fair, I have to give every student the same opportunity to do extra work. Obviously, this is not feasible.  However, on occasion I will allow you to resubmit an assignment for grade improvement.

Q. What can I do to check my understanding of the material and to prepare for the exams?

  • You can do the problems from the end of each chapter. The answers can be found on the Web.
  • You can also try quizzes from past terms. Frequently, the answers to quiz problems can also be found on my webpages.
  • You can try to answer the questions at the end of media articles.
  • You can read current newspaper and magazine articles on relevant topics and make up your own questions and articles.

Q. What do I have to study from each chapter?
Ans. In each chapter, you should know the definitions and the meanings of key terms, and be able to put them into context. Also, look at the list of terms and short questions on the Some Importants Terms and Concepts page.


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