FINANCE 1613: Foundations of Finance at UNSW
FINANCE 1613, Foundations of Finance, is a core introductory course offered by the School of Banking and Finance at the University of New South Wales (UNSW) Business School. It serves as a fundamental building block for students pursuing degrees in finance, accounting, economics, and related disciplines. The course aims to equip students with the essential principles and tools necessary to understand and analyze financial decisions in various contexts. The curriculum of FINANCE 1613 typically covers a broad range of topics, designed to provide a comprehensive overview of core financial concepts. These usually include: * **Time Value of Money:** A cornerstone of finance, this section emphasizes the understanding of present and future values, discounting, compounding, and their applications in investment appraisal and loan calculations. Students learn to critically evaluate the trade-offs between receiving money today versus receiving it in the future. * **Risk and Return:** This module introduces the concepts of risk, return, and diversification. Students learn how to measure risk (using measures like standard deviation and beta), understand the relationship between risk and expected return, and construct diversified portfolios to manage risk. * **Valuation of Securities:** A significant portion of the course is devoted to understanding how to value different types of financial assets, including bonds and stocks. Students learn about various valuation models, such as discounted cash flow analysis, and the factors that influence asset prices. * **Capital Budgeting:** This area focuses on the process of making investment decisions for corporations. Students learn techniques like Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period to evaluate potential investment projects and determine whether they should be accepted or rejected. * **Financial Statement Analysis:** Students gain an understanding of how to interpret and analyze financial statements (balance sheets, income statements, and cash flow statements) to assess a company’s financial performance and health. Key financial ratios are introduced and applied to real-world case studies. The learning experience in FINANCE 1613 usually involves a combination of lectures, tutorials, and assignments. Lectures provide the theoretical foundation, while tutorials offer opportunities for students to apply the concepts learned through problem-solving and case studies. Assignments may include individual or group projects that require students to analyze real-world financial data and make informed decisions. The course often utilizes spreadsheets (like Microsoft Excel) as a crucial tool for financial modeling and analysis. Students are expected to develop proficiency in using spreadsheets to perform calculations, create financial models, and analyze data. Assessment in FINANCE 1613 typically consists of a combination of: * **Mid-semester exam:** Testing students’ understanding of the concepts covered in the first half of the semester. * **Assignments:** Requiring students to apply the concepts learned to solve practical problems or analyze case studies. * **Final exam:** A comprehensive assessment of all the material covered throughout the semester. Upon successful completion of FINANCE 1613, students are well-prepared to undertake more advanced courses in finance and to apply their knowledge in various professional settings. The concepts and skills learned in this course are highly valuable for careers in investment banking, financial analysis, corporate finance, and portfolio management. The course provides a solid grounding in financial theory and practice, enabling students to make informed financial decisions in both their personal and professional lives.