Finance, Insurance, and Business Law

Raman Kumar, Interim Head

Crestar Professor of Finance: G. E. Morgan

Crestar Professor of Banking: J. M. Pinkerton

First Union Professor of Financial Risk Management: D.M. Chance

R. B. Pamplin Professor of Finance: A. J. Keown

R.V. and A.F. Oliver Professor of Investment Management: R. Kumar

Professors: J. S. Hiller; G. B. Kadlec, D. M. Patterson; M. I. Schneller; V. Singal; D. K. Shome; G. R. Thompson

Associate Professors: R. S. Billingsley; V. A. Bonomo; J. C. Easterwood

Assistant Professor: H. Gulen; A. Mozumdar; B. Remmers

Instructors: D. S. Haga, Jr.; S.D. Smith

Career Advisor: R.S. Billingsley (231-7374)

E-mail: rkumar@vt.edu

The undergraduate curriculum in Finance, Insurance, and Business Law provides training and specialization in all aspects of raising and allocating financial capital. Finance is a specialty area that deals with the allocation of resources on the corporate, institutional, and personal levels. Financial management encompasses the sources and uses of funds in all sectors of the economy. This program gives students perspectives on decision-making problems in business, computer-based financial analysis, the institutional and legal structures of corporate finance and financial institutions, and the application of theoretical models. The program culminates with case-oriented course work that will let students apply knowledge to realistic situations.

Traditionally, three separate but related fields within finance are identified: 1) Corporate Finance, which focuses on the internal decisions of companies to raise funds and invest in corporate assets; 2) Investments, which focuses on the purchase and sale of stocks and bonds or their derivatives by individuals or institutions; and 3) Financial Institutions, with a focus on the management and regulation of institutions such as banks and the role that financial institutions play in the economy. The curriculum requires students to take courses in each of these areas to provide a strong, broad-based foundation. In addition, students take elective courses in finance and accounting, allowing them to fulfill the requirements of a General Finance track or special tracks in the areas of Financial Accounting and Financial Risk Management.

The curriculum offers courses in finance, insurance, and business law, but a major only in finance. Many students contemplating legal careers elect to take courses in law beyond those required by the curriculum, and the department provides pre-law advising to interested students.

Requirements

Students electing this major will take a series of commonly required courses.

Required Courses (15 semester hours):
FIN 3114: Intermediate Financial Management	(3)
FIN 3124: Computer-Based Financial Analysis	(3)
FIN 4104: Advanced Financial Management	(3)
FIN 4114: Investment Analysis and Equity Markets	(3)
FIN 4124: Interest Rates and Debt Markets	(3)

Requirements for specific tracks:

General Finance Track:
Select 12 semester hours from the elective courses below. At least 6 hours must be FIN courses.

Financial Accounting Track:
Select ACIS 3115, ACIS 3116, ACIS 3215, and one FIN course from the elective courses below.

Financial Risk Management Track:
Select FIN 4164, FIN 4174, FIN 4144, and any one course from the elective courses below.

Elective Courses:
FIN 4134: Commercial Bank Management	(3)
FIN 4144: International Financial Management	(3)
FIN 4154: Real Estate Finance	(3)
FIN 4164: Financial Derivatives I	(3)
FIN 4174: Financial Derivatives II	(3)
FIN 4184: Investment Banking	(3)
ACIS 3115, 3116: Financial Accounting I & II	(6)
ACIS 3215: Cost Accounting	(3)
ACIS 3284: Managerial Accounting	(3)

Undergraduate Courses (FIN)

2954: BUSINESS STUDY ABROAD

This course provides students with an international business experience. It is only offered as part of a program outside the United States. Students will learn from the structured educational experience developed by the faculty leader. Pre: Instructor's consent and the completion of 30 semester hours with a minimum GPA of 3.0, or departmental consent. Variable credit course.

3055-3056: LEGAL ENVIRONMENT OF BUSINESS

Examines the legal environment in which businesses operate, specifically addressing both private law involving the relationships between individual businesses and public law involving the legal relationship between businesses and society. Junior standing required. (3H,3C) I,II,III.

3064: LEGAL ENVIRONMENT OF BUSINESS FOR ACCOUNTANTS

Examines the legal environment in which businesses operate, specifically addressing both private law involving the relationships between individual businesses, and public law involving the legal relationship between businesses and society. The course is geared specifically for accounting students who will take the CPA exam. Junior standing required. Pre: 3055. (3H,3C) II.

3104: INTRODUCTION TO FINANCE

Overview of financial decision-making process focusing on the creation of wealth. Topics covered include the time value of money, how stocks and bonds are valued, financial decision-making within a firm, an overview of financial markets, and investment banking. The course is designed for finance and non-finance majors. Junior standing required. Pre: ACIS 2115 or ACIS 2004. (3H,3C) I,II,III,IV.

3114: INTERMEDIATE FINANCIAL MANAGEMENT

Analysis of the concepts critical to the financial manager in a contemporary environmentrisk valuation, cost of capital, capital structure, long-term finance, as well as topics of special interest like mergers, leasing, and multinational finance. Junior standing required. Pre: 3104. (3H,3C) I,II,III.

3124: COMPUTER BASED FINANCIAL ANALYSIS

Develops the computer skills required for financial analysis and decisions. Includes automated business information and data search; spreadsheet analysis and data base management in solving finance problems; report writing, graphics, and Power Point presentation. Pre: 3104. (3H,3C) I,II.

3204: RISK & INSURANCE

Surveys the concept of risk as it applies to the nuclear family and as a socio-economic force in society. Risk management techniques utilizing social and proprietary insurance to neutralize the effect of risks inherent in daily life: termination or suspension of earnings, liability exposures, and potential losses of real and personal property values. Junior standing required. (3H,3C) I,II,III.

3304: SURVEY OF INVESTMENTS

Examines the basic principles and concepts in investing with emphasis on investment decisions of the individual investor. Coverage of the financial environment, financial instruments, risk and return, portfolio management and performance evaluation. Not available for credit for business majors. Junior standing required. (3H,3C) I,II.

3954: STUDY ABROAD

Variable credit course.

4004: WILLS, TRUSTS, & ESTATES

Examines the control of assets through the creation and use of trusts, and the control of property through estate planning. The course emphasizes financial planning through estate management both personally and as a part of a business plan. Pre: 3055. (3H,3C).

4014: INTERNET, ELECTRONIC & ONLINE LAW

Study of the international legal environment and regulation of the electronic world, including electronic commerce, computer and media communication issues, and speech over the Internet. Webpage design, copyright, electronic payment, electronic contract, encryption, and privacy are some issues to be examined. Topics will be updated continually to reflect the newest developments of the law as applied to the electronic world of commerce. Pre: Junior/Senior standing or consent of instructor. (3H,3C).

4104: ADVANCED FINANCIAL MANAGEMENT

Finance 4104 applies the case method to selected areas of financial decision making within the corporation. Emphasis is placed on isolating key financial issues and designing creative and reasonable recommendations for action. Pre: 3114. (3H,3C) I,II.

4114: INVESTMENT ANALYSIS & EQUITY MARKETS

Examines the role and functioning of equity markets. Specific topics include security valuation, portfolio theory, efficient market hypothesis, asset allocation and portfolio management, mutual fund performances, evaluation and selection, stock options, and futures contracts. Pre: 3104. (3H,3C) I,II.

4124: INTEREST RATES & DEBT MARKETS

Analysis of fixed income securities. The course covers topics in the foundations, term structure, and risk structure of interest rates, government and corporate bond markets, valuation, managing bond risk, asset backed securities, and the management of debt funds. Pre: 3104. (3H,3C) I,II.

4134: COMMERCIAL BANK MANAGEMENT

Emphasis on the major issues facing managers of financial institutions focusing primarily on commercial banks. Topics include asset, liability, and capital management, the regulatory environment, and special topics. Pre: 3104. (3H,3C) I,II.

4144: INTERNATIONAL FINANCIAL MANAGEMENT

Explores the environmental challenges facing the financial manager of a multinational corporation and the tools and techniques developed to meet such challenges. Pre: 3104. (3H,3C) II.

4154: REAL ESTATE FINANCE

This course introduces the fundamentals of both real estate financing and investment. Conventional mortgages as well as more creative financing methods will be analyzed. The secondary market for mortgages and relevant institutional factors also will be examined. Investment analysis of real estate will be viewed in a capital budgeting framework; appropriate tax law will be discussed as it affects real estate cashflows. Pre: 3104. (3H,3C) II.

4164: FINANCIAL DERIVATIVES I

Examines the use of financial derivatives in managing the risk of decisions in financial markets. Overview of financial derivatives. Option principles, pricing and strategies. Review of pricing spot assets. Futures and forward contract principles, pricing and strategies. Pre: 3114 or 4114. (3H,3C) I,II.

4174: FINANCIAL DERIVATIVES II

Continuation of 4164 with coverage of advanced strategies involving options on futures, currency derivatives, interest rate derivatives including swaps, options, forward rate agreements, structured notes and mortgage-backed securities. Advanced equity derivatives. Risk management of corporations and dealers. Pre: 4164. (3H,3C) II.

4184: INVESTMENT BANKING

Study of the operation and practices of investment banks involved with the raising of capital for private and public enterprises and the restructuring of private enterprises and government entities with investment banks and universal banks. The course will emphasize both the U.S. industry, and the rapidly evolving global industry. In addition to examining several different transactions, the course will examine competition and regulation issues. Time will also be spent covering the nature of conflicts of interest and ethical dilemmas that are inherent in investment banking. Topics will be updated periodically to reflect recent trends and innovations within the industry. Pre: 3114. (3H,3C).

4204: LIFE INSURANCE & FINANCIAL PLANNING

Focuses on role of life insurance as hedge against losses caused by interruption or termination of earnings due to death, disability, unemployment, old age. Evaluates life and health insurance as means of transferring risk; compares to other savings/investing media; examines usefulness in estate planning. Integrates financial planning, sociology, economics, psychology, finance, tax planning, government regulation and the law. Pre: 3204. (3H,3C) II.

4214: ADVANCED PROPERTY & LIABILITY INSURANCE

Study of principles, concepts, institutional arrangements, and policies which are relevant for risk management in the business environment. Pre: 3204. (3H,3C) II.

4974: INDEPENDENT STUDY

Variable credit course.

4984: SPECIAL STUDY

Variable credit course.

4994: UNDERGRADUATE RESEARCH

Variable credit course.

Please see the Graduate Catalog for graduate course listings.