Business Finance

[kksy]

I am thinking about to take Business Finance as my breadth. But I cant find any reviews for that subject online. If you have done it, could you tell me your feeling towards this subject? and what does the exam look like? Is it easy to get a H1 in that subject? Should I take it as my Breadth?

[Amity]

Hey, I took business finance last semester so I’ll have a shot, even though it’s only been a couple of months it feels like its been so long haha I didn’t do finance 1 so I can’t compare it to that, although I’ve heard that it is somewhat different. That could be wrong though.

The subject is split into two halves; the first 6 weeks focuses on investments, while the second half of semester looks at corporate finance.
For the investments side of things, you start off with some basic financial maths (types of interest, debt vs equity, etc) and then spend a few weeks discussing some theories/models for pricing assets and portfolios. The two covered in more depth in this section would be modern portfolio theory and CAPM, but you do look quickly at some others like the principle of no arbitrage. If you come from a maths/hard science background then you would most likely find this to be quite straightforward. The concepts are definitely far easier than first year maths/chem/physics/etc. On the other hand, if you haven’t really done any finance before a lot of it may seem to be quite new and different and it may take a little while to get used to. Since you’re looking at it as a breadth I presume that you’ve already done finance 1? In which case that shouldn’t be too much of an issue.

These lectures would typically involve stating some formulas/theories and then doing a few practice problems. I quite disliked this approach and preferred the more rigorous approach of financial maths 1 but that’s just a personal thing. You get all the formulas on a formula sheet for both the midsem and final.


The corporate finance section is a lot more theory based, and in general you analyse broadly a firms financial policies - investment decisions, capital structure, whether or not dividends are paid, etc.

You start off this by looking at a few methods for comparing projects – with the big two probably being NPV and internal rate of return. These four or so lectures are more mathematical, along the lines of the first 6 weeks. The remaining portion of corporate finance is much more theoretical, and you deal a lot with Modigliani/Miller analysis when looking at capital structure and dividend policy. Finally, the last week covers some derivatives. So you look at futures/forwards and options and how you can use them for hedging.


For assessment, there were some multiple choice assignments and it wasn’t uncommon for students to get full marks on both of these (they were only worth 15% in total).

The mid semester exam was probably a shock to most people, I think the average was something like 14/20, although I’m not sure if that should be considered bad or good haha (I think midsems are generally easier than finals? That may just be me though). The hardest thing about it would definitely have been the theory, especially when you get those multiple choice questions that are so very close but have slight differences and you have to discern which of them is correct, or perhaps if more than one/none are correct. To do very well in this, you actually have to know all the content very well, rather than just being able to “do the maths”. Unfortunately, one or two of the questions were drawn from something that was quite obscure, as in just a passing note in a lecture. If you know the content well though, it was certainly quite doable. 

The final also had a large portion of theory on it, probably something like 50/50. I think ours had a bit more maths than previous semesters though. Again, you need to know the content very well - know why the theories work and what they rely on, etc. The exam focuses on the second half of semester more; the first quarter or so was drawn from the first six weeks and was all multiple choice, while the rest of the exam was more of an extended response, where you had to analyse some projects (more maths) or apply theories (expect to write quite a bit). We were told that only the second six weeks of the course would be in the extended response, but believe it or not, the first extended response question came from the first 6 weeks.


In terms of it being an easy H1, that probably depends a lot on you (I’m sorry, I know that doesn’t help very much). Having taken a couple of semesters of financial maths and being quite mathematically minded I found it quite straightforward and boring. Going back a long way now, I think the maths problems are generally easier than maths methods ones if that helps. In general, if you’re good at maths and have a good memory then it shouldn’t be very hard to get a H1. I think our semester there were 5% of people that got above 85, but in first semester there were 10%.
If maths isn’t really your thing, then it will probably take a bit of effort to get a H1, but if you are diligent in doing the tutorial problems, redoing lecture examples, and ensuring you understand the content well, then it is certainly doable. If you took the accounting/maths pathway instead of finance 1 then it may appear a bit confronting at first, though it should come together quite quickly and the accounting subject may help you make more sense of the second half of the semester. Of all the second year units I have taken, I would definitely have to say that I found business finance was the easiest (potentially aside from organisational behaviour which can be a bit of a mixed bag ). Of course, your mileage may vary.

If you have any other questions about it feel free to ask . I should probably edit this into a review haha. Also, don’t bother buying the textbook (unless you are struggling with it and want more practice questions or something I guess). Hope that helps a bit!

[teexo]

This was really helpful as I'm thinking about doing this subject too! Can I ask who your lecturer was and your thoughts on him/her?

[Amity]

We had two lecturers - Sturla Fjesme took the investments side of the course and Vincent Gregoire took corporate finance. I thought they were good, but as I said I didn't really like the style of the lectures which tended to be quite matter-of-facty and were often just like "this is the formula for this" instead of deriving the formula/looking at why it would be that. This isn't really their fault though - the slides and tutorial questions have stayed the same for a while now. The slides were actually quite detailed and so often there would be a bit to get through and they wouldn't really have had time to add in a lot more I suppose. I guess it's more of a structural thing with the course that I disliked. Of course that's just me though - some students (maybe even most) would prefer this approach anyway. So given the style of the lectures I thought they were fine. There definitely weren't any problems with either of the two.

Since the slides were pretty detailed and so I actually didn't go to all that many of the lectures. There were only a few things that were left as an open question in the slides and most of these weren't too difficult to figure out on your own. For some of the theory later in the course I listened to some of the semester one lectures (by Joshua Shemesh) since our lectures weren't recorded. I really liked his lectures - but then I didn't go to the corresponding ones given in our semester so I can't compare them, and this part of the course gave the lecturer more opportunity to "add" to the slides. If you value recordings, it may be easiest to do it in the semester when Joshua Shemesh takes it (provided it all stays the same).

[notveryasian]

Well that helps me look forward to the subject in Sem 1 since I talked to some people who completed the subject in Sem 2 and disliked it.

And is it okay if you copy and paste your post into a review for BusFi Amity? A few people would definitely appreciate it! (myself included haha) Subject Review Requests

[Amity]

Yeah I'll do it when I get home tonight. I think most of my complaints would apply to it in semester 1 as well though but the recorded lectures are definitely a plus.

[Avadraze]

Hey, I took business finance last semester so I’ll have a shot, even though it’s only been a couple of months it feels like its been so long haha I didn’t do finance 1 so I can’t compare it to that, although I’ve heard that it is somewhat different. That could be wrong though.

The subject is split into two halves; the first 6 weeks focuses on investments, while the second half of semester looks at corporate finance.
For the investments side of things, you start off with some basic financial maths (types of interest, debt vs equity, etc) and then spend a few weeks discussing some theories/models for pricing assets and portfolios. The two covered in more depth in this section would be modern portfolio theory and CAPM, but you do look quickly at some others like the principle of no arbitrage. If you come from a maths/hard science background then you would most likely find this to be quite straightforward. The concepts are definitely far easier than first year maths/chem/physics/etc. On the other hand, if you haven’t really done any finance before a lot of it may seem to be quite new and different and it may take a little while to get used to. Since you’re looking at it as a breadth I presume that you’ve already done finance 1? In which case that shouldn’t be too much of an issue.

These lectures would typically involve stating some formulas/theories and then doing a few practice problems. I quite disliked this approach and preferred the more rigorous approach of financial maths 1 but that’s just a personal thing. You get all the formulas on a formula sheet for both the midsem and final.


The corporate finance section is a lot more theory based, and in general you analyse broadly a firms financial policies - investment decisions, capital structure, whether or not dividends are paid, etc.

You start off this by looking at a few methods for comparing projects – with the big two probably being NPV and internal rate of return. These four or so lectures are more mathematical, along the lines of the first 6 weeks. The remaining portion of corporate finance is much more theoretical, and you deal a lot with Modigliani/Miller analysis when looking at capital structure and dividend policy. Finally, the last week covers some derivatives. So you look at futures/forwards and options and how you can use them for hedging.


For assessment, there were some multiple choice assignments and it wasn’t uncommon for students to get full marks on both of these (they were only worth 15% in total).

The mid semester exam was probably a shock to most people, I think the average was something like 14/20, although I’m not sure if that should be considered bad or good haha (I think midsems are generally easier than finals? That may just be me though). The hardest thing about it would definitely have been the theory, especially when you get those multiple choice questions that are so very close but have slight differences and you have to discern which of them is correct, or perhaps if more than one/none are correct. To do very well in this, you actually have to know all the content very well, rather than just being able to “do the maths”. Unfortunately, one or two of the questions were drawn from something that was quite obscure, as in just a passing note in a lecture. If you know the content well though, it was certainly quite doable. 

The final also had a large portion of theory on it, probably something like 50/50. I think ours had a bit more maths than previous semesters though. Again, you need to know the content very well - know why the theories work and what they rely on, etc. The exam focuses on the second half of semester more; the first quarter or so was drawn from the first six weeks and was all multiple choice, while the rest of the exam was more of an extended response, where you had to analyse some projects (more maths) or apply theories (expect to write quite a bit). We were told that only the second six weeks of the course would be in the extended response, but believe it or not, the first extended response question came from the first 6 weeks.


In terms of it being an easy H1, that probably depends a lot on you (I’m sorry, I know that doesn’t help very much). Having taken a couple of semesters of financial maths and being quite mathematically minded I found it quite straightforward and boring. Going back a long way now, I think the maths problems are generally easier than maths methods ones if that helps. In general, if you’re good at maths and have a good memory then it shouldn’t be very hard to get a H1. I think our semester there were 7% of people that got above 85, but in first semester there were 10%.
If maths isn’t really your thing, then it will probably take a bit of effort to get a H1, but if you are diligent in doing the tutorial problems, redoing lecture examples, and ensuring you understand the content well, then it is certainly doable. If you took the accounting/maths pathway instead of finance 1 then it may appear a bit confronting at first, though it should come together quite quickly and the accounting subject may help you make more sense of the second half of the semester. Of all the second year units I have taken, I would definitely have to say that I found business finance was the easiest (potentially aside from organisational behaviour which can be a bit of a mixed bag ). Of course, your mileage may vary.

If you have any other questions about it feel free to ask . I should probably edit this into a review haha. Also, don’t bother buying the textbook (unless you are struggling with it and want more practice questions or something I guess). Hope that helps a bit!

This is my very first post here in Atarnotes forum 

Your review on Business Finance is very insightful. I have a question about Financial Maths 1. Does the content of the subject overlaps with Business Finance in terms of the financial mathematics part of the subject?

And i would really like to know what's your take on Financial Mathematics 1, is it a very tough subject? How would you compare it to say, Introduction to Actuarial Studies. I have gone through the Calc 2 and Linear Algebra pathway, does that indirectly put me at a slight disadvantage taking on Financial Mathematics 1 compared to my AM1/2 buddies?

[Amity]

Hey, welcome!

Unfortunately there's not an awful lot of overlap between Financial Maths 1 and Business Finance, but there is some. All of the very basic parts are covered in each course (such as the simple annuities, present value, accumulations) which you would know coming from an introduction to actuarial studies anyway. You would also encounter simple compound interest problems (like creating a loan schedule or valuing a bond) in each course. The financial maths things in busfi then move onto the basics of other things which are taught in later FM courses - there's five FM courses in total (including AFM1&2) so they tend to go more into depth at each part, I think. So in FM1 you see more types of annuities, generalising nominal interest rates, etc, which are all skipped in busfi.

There is also a little bit of overlap between FM1 and the corporate finance section of the course. Things like the NPV and IRR methods for analysing projects are covered in both courses, although in FM1 you actually have to find the IRR, unlike in busfi. You also need to know some theory on financial markets in both courses, busfi probably goes into a bit more depth here.

I would say there's probably around 4 weeks of complete overlap, so it's certainly a fair amount, though of course you will have to put some effort into both. In general I would say that FM1 problems would expect a higher level of you than the corresponding busfi ones, so that should help a bit for busfi.


I'll upload a review for FM1 and put it in the subject reviews/ratings thread a bit later on tonight, but on the whole the coursework in FM1 is not overly demanding and would be simpler than what you've encountered in linalg/calc2. In terms of conceptual difficulty I don't think it would really be harder than an introduction to actuarial, although our final exam was harder. Much harder. I don't think many (if anyone) finished the exam. That could have just been our year though, and results were definitely scaled up significantly.

As for not taking AM1/2 - I would have to say yes there is a little bit of an indirect disadvantage, but nothing severe. There's no direct disadvantage because you're not going to be examined on anything you missed out on (unless ample notes/resources are provided, such as a little appendix at the back on the FM1 and 2 book, but I don't think they really even examined it anyway). The real way I would think that it puts you at a disadvantage is simply that the students who took AM1/2 were pushed to a higher level through the year, particularly in semester 2. Maybe it's just me but I find that the more I challenge myself with difficult subjects, the easier other subjects become. So in that sense it helps a bit to have done AM1/2, but it's not a make-or-break. Just how much of an impact that has would be up for debate. There are definitely some students that make it through fine from the linalg/calc2 pathway. If you feel like you have "missed out" though, you can take real analysis as a breadth if you haven't used up your free elective yet. I would advise doing so in second year as opposed to third year though.

[kksy]

Hey, I took business finance last semester so I’ll have a shot, even though it’s only been a couple of months it feels like its been so long haha I didn’t do finance 1 so I can’t compare it to that, although I’ve heard that it is somewhat different. That could be wrong though.

The subject is split into two halves; the first 6 weeks focuses on investments, while the second half of semester looks at corporate finance.
For the investments side of things, you start off with some basic financial maths (types of interest, debt vs equity, etc) and then spend a few weeks discussing some theories/models for pricing assets and portfolios. The two covered in more depth in this section would be modern portfolio theory and CAPM, but you do look quickly at some others like the principle of no arbitrage. If you come from a maths/hard science background then you would most likely find this to be quite straightforward. The concepts are definitely far easier than first year maths/chem/physics/etc. On the other hand, if you haven’t really done any finance before a lot of it may seem to be quite new and different and it may take a little while to get used to. Since you’re looking at it as a breadth I presume that you’ve already done finance 1? In which case that shouldn’t be too much of an issue.

These lectures would typically involve stating some formulas/theories and then doing a few practice problems. I quite disliked this approach and preferred the more rigorous approach of financial maths 1 but that’s just a personal thing. You get all the formulas on a formula sheet for both the midsem and final.


The corporate finance section is a lot more theory based, and in general you analyse broadly a firms financial policies - investment decisions, capital structure, whether or not dividends are paid, etc.

You start off this by looking at a few methods for comparing projects – with the big two probably being NPV and internal rate of return. These four or so lectures are more mathematical, along the lines of the first 6 weeks. The remaining portion of corporate finance is much more theoretical, and you deal a lot with Modigliani/Miller analysis when looking at capital structure and dividend policy. Finally, the last week covers some derivatives. So you look at futures/forwards and options and how you can use them for hedging.


For assessment, there were some multiple choice assignments and it wasn’t uncommon for students to get full marks on both of these (they were only worth 15% in total).

The mid semester exam was probably a shock to most people, I think the average was something like 14/20, although I’m not sure if that should be considered bad or good haha (I think midsems are generally easier than finals? That may just be me though). The hardest thing about it would definitely have been the theory, especially when you get those multiple choice questions that are so very close but have slight differences and you have to discern which of them is correct, or perhaps if more than one/none are correct. To do very well in this, you actually have to know all the content very well, rather than just being able to “do the maths”. Unfortunately, one or two of the questions were drawn from something that was quite obscure, as in just a passing note in a lecture. If you know the content well though, it was certainly quite doable. 

The final also had a large portion of theory on it, probably something like 50/50. I think ours had a bit more maths than previous semesters though. Again, you need to know the content very well - know why the theories work and what they rely on, etc. The exam focuses on the second half of semester more; the first quarter or so was drawn from the first six weeks and was all multiple choice, while the rest of the exam was more of an extended response, where you had to analyse some projects (more maths) or apply theories (expect to write quite a bit). We were told that only the second six weeks of the course would be in the extended response, but believe it or not, the first extended response question came from the first 6 weeks.


In terms of it being an easy H1, that probably depends a lot on you (I’m sorry, I know that doesn’t help very much). Having taken a couple of semesters of financial maths and being quite mathematically minded I found it quite straightforward and boring. Going back a long way now, I think the maths problems are generally easier than maths methods ones if that helps. In general, if you’re good at maths and have a good memory then it shouldn’t be very hard to get a H1. I think our semester there were 7% of people that got above 85, but in first semester there were 10%.
If maths isn’t really your thing, then it will probably take a bit of effort to get a H1, but if you are diligent in doing the tutorial problems, redoing lecture examples, and ensuring you understand the content well, then it is certainly doable. If you took the accounting/maths pathway instead of finance 1 then it may appear a bit confronting at first, though it should come together quite quickly and the accounting subject may help you make more sense of the second half of the semester. Of all the second year units I have taken, I would definitely have to say that I found business finance was the easiest (potentially aside from organisational behaviour which can be a bit of a mixed bag ). Of course, your mileage may vary.

If you have any other questions about it feel free to ask . I should probably edit this into a review haha. Also, don’t bother buying the textbook (unless you are struggling with it and want more practice questions or something I guess). Hope that helps a bit!

Thanks Sorry about replying you soo late. yeahh I am doing Bus Finance atm and just did my mst. I actually like the subject, it is very organised, and tutors are very good as well. but For mst, i think there are a few tricky questions, but in general it is ok.

[Amity]

Amity, that Business Finance review is absolutely amazing, you convinced me to take it as my breadth this semester!

I'll be doing Finance related breadths for the rest of my degree.
So if you're pursuing Finance, your contribution on ATARnotes at the end every end of semester (or even more often!) would be greatly appreciated!!

Thank you so much !!!

Did I? I didn't think I gave it an overwhelmingly positive review hahah.

Unfortunately I probably won't be doing any more finance subjects in the rest of my degree (unless someone can convince me to do so with my last elective - which I really can't decide on). I do have a few friends are majoring in finance though, so I could probably gauge out some information about the third year subjects when they've done them. The general consensus is that derivative securities is the hardest of the main ones though.


As a side note - I actually stumbled across the letter from the finance department today while I was cleaning some stuff out - turns out it was 5% of people that got above 85%, now I have no idea why I thought it was 7%.

[jtvg]

Amity, that Business Finance review is absolutely amazing, you convinced me to take it as my breadth this semester!

I'll be doing Finance related breadths for the rest of my degree.
So if you're pursuing Finance, your contribution on ATARnotes at the end every end of semester (or even more often!) would be greatly appreciated!!

Thank you so much !!!

Definitely do Corp Fi after you do Bus Fi