1 Course Syllabus MF501 Mathematics for Finance (2 credits ...

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Course Syllabus

MF501 Mathematics for Finance (2 credits) Semester Pre-course 2020

Master of Science Program in Finance International Program (MIF)

Thammasat Business School, Thammasat University

1. Lecturer and course administrator with contact information

Name Assistant Professor Supranee Lisawadi, Ph.D. (SL) (Lecturer)

E-mail: [email protected]

Name Associate Professor Pantisa Pavabutr, Ph.D. (PS) (Course administrator)


2. Prerequisite: none

3. Class Date, Time and Venue: See in Google Calendar.

4. Course Description

Financial mathematical background for students entering the graduate program in finance.

The course covers the rudiments of probability theory and statistics relevant to the theory of

investment and introductory linear algebra involving matrix operation such as determinant and

inverse of matrix. The mathematical background in calculus necessary to understand how

mathematical techniques are used in finance. Calculus, such as functions, limits, and continuity, the

derivatives, analysis of functions, applications of derivatives, and integration and principles of integral

evaluation, etc.

5. Course Objectives

This preparation course is targeted at in-coming MIF students as a refresher course in mathematical

tools that have wide applications in finance problems. Unlike a typical mathematics class, the course

focuses on using mathematics for financial applications, rather than strictly on finance, or strictly on

mathematics to allow students to enhance their quantitative skills that will help them to deal with full

semester classes.

6. Expected learning outcomes (Based on curriculum mapping)

Morality and Ethics Expectations

1. Realize the value of morality, ethics, integrity,

and honesty

2. Have self-discipline and punctuality,

professional and social responsibility

Regular class attendance and satisfactory

passing regular class quizzes.

Knowledge development Expectations

1. Have knowledge and understanding in

principle and important theories on related

topics

2. Able to analyze problems, understand finance

needs, and apply knowledge, skills and

management in solving problems

Satisfactory score in exams and class

participation on relevant topic in outline.


2

Intellectual development Expectations

1. Have analytical and systematical thinking

2. Able to search, analyze and evaluate

appropriate methods to solve problems

3. Able to apply knowledge and skills to solve

problems appropriately

Describe and provide examples how tools and

techniques used in class can be used in finance

work.

Interpersonal relationship and responsibility Expectations

1. Have responsibility for learning development

of individuals and others

Active participation in class

Analytical and communication skills Expectations

1. Can use existing tools in finance work Active participation in class

7. Course evaluation, grading criteria, grading system, and course rules

7.1. Evaluation

Methods/Activities Weights Assigned

In-class quizzes/self-test 60%

Test 1 (Calculus) 20%

Test 2 (Prob, distributions &

linear algebra)

20%

Total 100%

7.2. Grading criteria

60% passing score on total scores

7.3. Grading system

Details of the grading system will be in accordance with Thammasat University's regulation

for graduate studies.

Grade P NP

Result Pass Not pass

8. Reference materials

8.1. Recommended texts and materials

Andrilli, and Hecker, Elementary linear algebra, Harcourt. 1999

Defusco, McLeavey, Pinto, and Runkle, Quantitative investment analysis, 2004, Second edition

James Stewart, Calculus, 8th ed., Thomson Brooks/Cole, 2016.

Pantisa Pavabutr, Mathematics for Financial Applications, 2017.


3

9. Course plan

Session Topic Lecturer/

Online learning

Session 1

June 14, 2020

03:00 - 06:00 pm

Limits and Continuity (SL) / Zoom Cloud Meetings

Session 2

June 17, 2020

06:30- 09:30 pm

Derivatives (SL) / Zoom Cloud Meetings

Session 3

June 21, 2020

09:00 am - 12:00 pm

Applications of Differentiation (SL) / Zoom Cloud Meetings

Session 4

June 25, 2020

06:30- 09:30 pm

Integrals (SL) / Zoom Cloud Meetings

Session 5

June 28, 2020

09:00 am - 12:00 pm

Partial Derivatives (SL) / Zoom Cloud Meetings

Test 1 (part SL) Sunday, July 5, 2020 | 09:00 am - 10:30 pm (1.5 hours)

Session 6

July 2, 2020

06:30- 09:30 pm

Counting rules and probability theory Marginal vs conditional probability Bayes’ rule: Classic building block of machine learning

(PS) / Zoom Cloud Meetings

Session 7

July 9, 2020

06:30- 09:30 pm

Distributions: Estimating likelihood of uncertain outcome with uniform, binomial, and poisson distributions


Session 8

July 16, 2020

06:30- 09:30 pm

Distributions: Estimating likelihood of uncertain outcome with normal distributions


Session 9

July 23, 2020

06:30- 09:30 pm

Data summary and hypothesis testing (PS) / Zoom Cloud Meetings

Session 10

July 30, 2020

06:30- 09:30 pm

Introduction to linear algebra and optimization (PS) / Zoom Cloud Meetings

Final exam (part PS) Saturday, August 8, 2020 | 09:00 am - 10:30 pm (1.5 hours)

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Course Syllabus

MF502 Introduction to Economics (2 credits) Semester Pre-course 2020




Name Associate Professor Chaiyuth Punyasavatsut, Ph.D. (CY) (Lecturer)


Name Associate Professor Tatre Jantarakolica, Ph.D. (TT) (Course administrator)



3. Class Date, Time and Venue: See in Google calendar


This class is an introduction to both macroeconomic and microeconomics and its concepts as

they pertain to finance. The class covers the following: 1. introduction to financial markets institution

and price setting. 2. Basic concept of supply and demand, how prices are set, elasticity. 3. Consumer

behavior. 4. Profit Maximization and Competitive Supply; Optimization with constraint: Profit

Maximization; 5. The Analysis of Competitive Markets; Imperfect Competition: Market Power; 6.

Macroeconomics: GDP, aggregate demand/supply; money demand/supply; 7. Fund flows/ interest

rates.

Concepts include descriptive statistics, inferential statistics, and probability distribution

theories. Basic concept in regression analysis including the Ordinary Least Squares (OLS) estimation

method, hypothesis testing of parameters, dummy variables regression model, and predicting of both

simple and multiple regression models. The tools of basic economics analysis including the concepts

of opportunity choice, and supply and demand. Macroeconomics which looks at large issues such as

economic growth, inflation, unemployment, fiscal and monetary policies and issues affecting the

entire economy.


Students will be familiar with basic economic tools and concepts related to consumer and

producer theories as a foundation for macroeconomics, as well as a simple macroeconomic

framework. The course also aims to introduce econometrics methodologies in order to prepare

students for graduate level empirical research. Econometrics methodology emphasizes on model

formulation, estimation method, and applications of the model using computer software.


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1. Realize the value of morality, ethics, integrity,

and honesty

2. Have self-discipline and punctuality,

professional and social responsibility

Comply with the rules and regulations


1. Have knowledge and understanding in

principle and important theories on related

topics




Acquire knowledge and key concepts in

microeconomics

Know how to properly and appropriately apply

econometric methodology.



2. Able to search, analyze and evaluate

appropriate methods to solve problems



Able to think and solve economic problems

using mathematics for economists and

econometrics.


1. Have responsibility for learning development

of individuals and others

Able to work and solve assigned problems in

team.


1. Can use existing tools in finance work

2. Able to apply knowledge obtained in problem

solving with creativity

Able to apply both mathematics, statistics, and

econometrics in analyzing finance-related

topics

7. Course evaluation, grading criteria, grading system, and course rules

7.1. Evaluation


Five take-home problem sets (CY) 50%

Assignments (TT) 10%

Take-home Final Exam (TT) 40%

Total 100%


Passing each section with at least 50% scores.

7.3. Grading system



Grade P NP



3


8.1. Main textbook

(CY) Pindyck, Robert S. and Rubinfeld, Daniel L. (2018) Microeconomics. 9th Edition, Pearson.

(CY) Varian, Hall (2015). Intermediate Microeconomics: A Modern Approach, 9th or 8th edition.

W.W. Norton & Company.

(CY) Barro, Robert (2008). Macroeconomics: A Modern Approach, Thomson/Southwestern;

2008.

(TT) Gujarati, D.N. & Porter, D.C. (2009). Basic Econometrics. 5th ed. Singapore: McGraw-Hill,

Inc.


Berndt, E.R. (1991). The Practice of Econometrics: Classic and Contemporary. New York:

Addison-Wesley Publishing. (Chapter 2)

Greene, W.H. (2008). Econometric Analysis. 6th ed. Upper Saddle River, NJ: Prentice Hall.

9. Course plan


Reading/Online

learning

Session 1

June 8, 2020

06:30- 09:30 pm

Consumer Theory (CY) PR. chapter 3, 4 /

Zoom Cloud Meetings

Session 2

June 15, 2020

06:30- 09:30 pm

Producer Theory (CY) PR. chapter 6, 7 /

Zoom Cloud Meetings

Session 3

June 22, 2020

06:30- 09:30 pm

Market Equilibrium and Competitive Market (CY) PR. chapter 8, 9 /

Zoom Cloud Meetings

Session 4

June 28, 2020

01:00- 04:00 pm

Imperfect Competition and Market Power (CY) PR. chapter 10 /

Zoom Cloud Meetings

Session 5

June 29, 2020

06:30- 09:30 pm

Basic Macroeconomics Concepts (CY) Barro chapter 1-3 /

Zoom Cloud Meetings

Session 6

July 13, 2020

06:30- 09:30 pm

Linear Regression Model

Estimation Method

- OLS

- Assumptions

(TT) G. chapter 1-4 /

Zoom Cloud Meetings

Session 7

July 17, 2020

06:30- 09:30 pm

Linear Regression Model (Cont.)

Estimated Result Interpretations

- Meaning of Coefficients

- Overall Test

- R-squares

- Individual Test


Zoom Cloud Meetings

Session 8

July 20, 2020

06:30- 09:30 pm

Linear Regression Model (Cont.)

Hypothesis Testing

Dummy Variable Technique


Zoom Cloud Meetings


4


Reading/Online

learning

Session 9

July 24, 2020

06:30- 09:30 pm

Problems - Violation of OLS assumptions

Multicollinearity

Specification Error

(TT) G. chapter 10, 13 /

Zoom Cloud Meetings

Session 10

July 27, 2020

06:30- 09:30 pm

Problems - Violation of OLS assumptions (Cont.)

Autocorrelation

Heteroskedasticity

(TT) G. chapter 12, 11 /

Zoom Cloud Meetings

Final exam

Wednesday, August 5, 2020 | 06:30 - 11:30 pm (5 hours)


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Course Syllabus

MF503 Fundamental Accounting and Finance (2 credits) Semester P-2020




Name Assistant Professor Orapan Yolrabil, DBA. (OY) (Lecturer)


Name Ajarn Konpanat Dumrongwong, Ph.D. (KD) (Lecturer)


Name Assistant Professor Orapan Yolrabil, DBA. (OY) (Course administrator)



3. Class Date, Time and Venue: See in Google Calendar

4. Communication channel

Accounting:

Please join Facebook group at https://www.facebook.com/groups/MF503.MIF.P.2020

Finance:

Please join LINE group at https://line.me/R/ti/g/X1yN8vhWC7


This class presents students with the importance of accounting as an informational role which

relates to business decision making. It also presents students with different accounting systems, how

to read accounting data and translate it to finance, and how business transactions are recorded. It

addresses accounting cycle, annual reports (56-1, 56-2 forms). The class covers how to read financial

reports including balance sheet, income statement, and cash flow statement (introduction). The

second part of this class includes time value of money, capital budgeting, and introduction to cost of

capital among other basic finance concepts.


Accounting is a business language. Understanding accounting information is a key in

understanding business. Moreover, the accounting information is an essential input for financial

analysis. The first part of this pre-course is, therefore, intended to acquaint students to accounting

information presented in financial statements. Since some students have very limited prior exposure

to finance, the second part of the pre-course serves students as foundation in finance for their future

rigorous finance coursework.

The purposes of this course are as follows:

5.1. To discuss the role of accounting and financial statements as a window through which to see

how economic events affect business.

5.2. To introduce the accounting conceptual framework as well as accounting procedures.

5.3. To discuss the tools and techniques in performing financial statement analysis.

5.4. To familiarize students with the basic concepts of finance.


2



1. Realize the value of morality, ethics, integrity, and

honesty

2. Have self-discipline and punctuality, professional

and social responsibility

Students must aware of professional ethics in

business.

Students are required to comply with rules and

regulations of the program and university.


1. Have knowledge and understanding in principle

and important theories on related topics




Students must gain fundamental knowledge in

accounting and finance after taken the course.

Students must be able to apply knowledge gained to

solve business problems using accounting and

financial information.



2. Able to search, analyze and evaluate appropriate

methods to solve problems



Students must be able to systematically analyze the

business problems, evaluate alternative solutions

and propose proper solution to the problem at

hands.


1. Have responsibility for learning development of

individuals and others

Students must be able to work in teams and respect

ideas of others.


1. Can use existing tools in finance work Students must be able to choose proper tools in

their finance works.

8. Course evaluation, grading criteria, and grading system

8.1. Evaluation


Assignments and Quizzes

Accounting 10%

Finance 10%

Final Exam

Accounting: Saturday, July 11, 2020 during 09:00 a.m. – 12:00 noon 40%

Finance: Saturday, August 1, 2020 during 09:00 a.m. – 12:00 noon 40%

Total 100%

(Note that weighting assigned might be changed as instructors see fit)


At least 60% for passing the class. Note that students are required to attain at least 60% of

total points of each part (accounting and finance). The results will be determined separately

for accounting and finance.

8.3. Grading system



Grade P NP



3


9.1. Main textbook

- Selected Thai Financial Reporting Standards (TFRSs)

- Financial Statements of Selected Listed Companies in Thailand

- Instructor’s class notes


The useful links are provided below:

- www.bot.or.th Bank of Thailand

- www.ifrs.org International Accounting Standard Board

- www.tfac.or.th Federation of Accounting Professions of Thailand

- www.moc.go.th Ministry of Commerce of Thailand

- www.sec.or.th Securities and Exchange Commission of Thailand

- www.set.or.th The Stock Exchange of Thailand

- www.settrade.com The Stock Exchange of Thailand Group

10. Course plan


Online Learning

Session 1

[13-06-2020]

[Morning session]

Course overview Accounting and business decisions; Functions of accounting; Users; Accounting information; Accounting system; Business activities; Business transactions

(OY) / Microsoft Teams

Session 2

[13-06-2020]

[Afternoon session]

Annual Reports and Financial Statements Accounting framework: Policies and Principles applied; Annual reports; Financial statements: Statement of financial position, Statement of comprehensive income, Statement of changes in owners’ equity, Statement of cash flows


Session 3

[20-06-2020]

[Morning session]

Accounting Cycle Basic accounting procedures; Effects of transactions on financial statement items; Financial statement articulation; Financial statement presentation and note disclosures


Session 4

[20-06-2020]

[Afternoon session]

Accounting Treatments for Selected Financial Statement Items Accounting treatments for selected items of assets, liabilities, and equity


Session 5

[27-06-2020]

[Morning session]

Statement of Cash Flows Classifications; Statement structure; Cash flows from operating activities, investing activities, and financing activities; Direct vs. Indirect method; Statement of cash flows disclosures; Noncash investing and financing activities; Supplemental cash flows information; Interpretation of cash flows information


Final exam (Accounting part)

Saturday, July 11, 2020 | 09:00 am - 12:00 noon (3 hours)


4


Online Learning

Session 6

[04-07-2020]

[Afternoon session]

Definition of business finance; Introductory concepts of finance: Opportunity cost, Risk-return trade-off; Financial managers’ responsibilities: Financing, Investing; Finance in the organizational structure of the firm; Goals of financial management; Wealth maximization and profit maximization; Agency relationship; Career opportunities in finance: Financial management; Investments; Financial institution management; Financial environments

(KD) / Zoom Cloud Meetings

Session 7

[11-07-2020]

[Afternoon session]

Time Value of Money; Time line, Present value, Future value, Cash flow, Lump sum, Annuity, Annuity due, Perpetuity, Non-annual cash flow, Interest rate, Nominal interest rate, Effective annual rate, Installment, Amortization


Session 8

[18-07-2020]

[Afternoon session]

Capital Budgeting I; Importance of capital budgeting; what is capital budgeting; Steps to do in capital budgeting; Independent and mutual exclusive project; Tools, Accounting or Financial Ratios, Payback period.


Session 9

[25-07-2020]

[Afternoon session]

Capital Budgeting II; Net present value, Internal rate of Return; Profitability index; Decision making whether to accept or reject project; value enhancement


Session 10

[26-07-2020]

[Afternoon session]

Cost of Capital; Cost of debt; Tax impact; Cost of preferred stock; Cost of equity; Weight in each component; Weighted Average Cost of Capital


Final exam (Finance part)

Saturday, August 1, 2020| 09:00 am - 12:00 pm (3 hours)

1 Course Syllabus MF501 Mathematics for Finance (2 credits ...

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