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Course Description

This course introduces financial decision making. Why it is that future cash flows need to be discounted using present value analysis? What are the best methods to calculate the fluctuating values of payments made at different times? Gain experience selecting the appropriate financial tools to determine the optimal interest rate to apply in various cash flow scenarios. Other topics include the valuation of bonds and stocks, the relationship between risk and the expected return on an asset, analysis of different types of risk, and the Capital Asset Pricing Model (CAPM).

Learner Outcomes

Upon successful completion of this course, students will be able to:
• Understand why future cash flows are less valuable than the same cash flow made today.
• Use tools to convert future cash flows into present value amounts.
• Recognize the difference between stated and effective annual interest rates.
• Determine willingness to pay for bonds and stocks, given assumed future expected payments of these assets.
• Understand the role of risk reduction through investment diversification.
• Calculate the expected return on an asset as a function of the amount of undiversifiable risk.

Prerequisites

Must have completed ECON 1 - Principles of Microeconomics, ECON 2 - Principles of Macroeconomics and ECON 3A - Financial Accounting (or equivalent courses) with a C grade or higher in each course. 

This Application for Candidacy must be completed and approved in order to enroll in this course and others within the Strategic Investments Program. 

 

Applies Towards the Following Certificates

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Application

Name
Strategic Investments Application

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Type
Online
Days
M, F
Time
3:00PM to 5:00PM
Dates
Oct 12, 2020 to Oct 19, 2020
Campus
Web-based Instruction
Type
Online
Days
F
Time
3:00PM to 4:00PM
Dates
Oct 23, 2020
Campus
Web-based Instruction
Schedule and Location
Contact Hours
19.0
Location
  • Web-based Instruction
Delivery Options
Course Fee(s)
Course fee credit (2 units) $300.00 Click here to get more information
Potential Discount(s)
Available for Credit
2 units
Instructors
Section Notes

Fall '20 Online: Class will run at the posted times via Zoom.  Link to Zoom meeting room and additional course materials will be posted to the course page in Gauchospace.

John L. Hartman, Ph.D., lecturer, Department of Economics, UCSB. Mr. Hartman has taught courses at UCSB on beginning and intermediate microeconomics, public finance, financial management, experimental economics, accounting information systems, risk and diversification, and asset valuation. He has received multiple research-related awards while at UCSB, including a dissertation grant for the 2005-2006 year by the UC Transportation Center.