Theoretical Foundations of Finance

Code:

2MiF01

Acronym:

TFF

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2020/2021 - 1S

Active?	Yes
Course/CS Responsible:	Master in Finance

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	3	Bologna Syllabus	1	-	6	42	162
MIF	42	Official Syllabus after 2020-2021	1	-	6	42	162

Teaching language

English

Objectives

Given the nature of the course, this unit is mainly theoretical. Its program aims at deepening the study of the main issues of the Theory of Finance, through a critical approach to its major proposals and problems. 

The program does not envisage a presentation of the basics of the discipline, although it will not go without ensuring, as often as possible, a quick review of the basic concepts and models. 

Learning outcomes and competences

The main objective is to consolidate the knowledge of the students on Finance issues, and train them on a critical approach to those issues, so that they may later be able to undertake research work and, thus, questioning all certainties exhibited by a theoretical discipline which has been subject to a process of rapid development.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Students who are contacting the discipline for the first time are advised to begin by studying carefully a basic Finance text book, from the many available. The same can be said with respect to those who might have acquired their financial education too long ago and might need an updating. 

Program

1. Introduction

2. Portfolio Theory

3. Capital Structure Theory

4. Asset Pricing Theory

5. Options Theory

6. Agency Theory

Mandatory literature

Copeland, Thomas E., J. Fred Weston e Kuldeep Shastri; Financial Theory and Corporate Policy, Pearson-Addison Wesley, 2005. ISBN: 0-321-12721-8

Complementary Bibliography

Tirole, Jean; The theory of corporate finance. ISBN: 978-0-691-12556-5

Teaching methods and learning activities

The development of the program is mainly theoretical. However, an effort is made to establish a relationship with reality, through the presentation of case studies and real world problems, in order to demonstrate the relevance and usefulness of all the concepts, formulations and models offered nowadays by the Theory of Finance. 

The direct participation of students in the classroom is encouraged. Moreover, the classes are organized into working groups, each one of which must submit one or more assignments  on a number of financial subjects that will be proposed in due time. 

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Exame	65,00
Trabalho escrito	25,00
Participação presencial	10,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Apresentação/discussão de um trabalho científico	10,00
Estudo autónomo	60,00
Frequência das aulas	42,00
Total:	112,00

Eligibility for exams

Students are evaluated taking into consideration their work in the form of theoretical or applied group assignments, their performance in a final exam and their participation in class quizzes.

Calculation formula of final grade

Students final marks will result from the weighted average of the marks assigned to the following factors: 

- Class participation (quizzes): 10%;
- Final exam (normal or recourse): 65%;
- Group assignment: 25%;

10% of the grade will be based  on student participating in class quizzes (using Socrative app); A grade of 20 in this component will be given to students with 100% quizz participation

The Group assignment is a compulsory component of the student assessment regardless of whether the final exam is taken in the normal period or in the recourse period. 

For a passing grade to be achived in this course, a minimum grade of 8 marks (in a scale of 0 to 20 marks) will be required in the final exam for a passing grade to take place, regardless of the grade achieved in the group assignment and the class participation, and even when the weighted average grade computed as above equals or exceeds 9.5 marks (in a scale of 0 to 20 marks).