TIØ4140 - Project Evaluation and Financing

About

Examination arrangement

Examination arrangement: Portfolio assessment
Grade: Letters

Evaluation form Weighting Duration Examination aids Grade deviation
Work 20/100
Written examination 80/100 4 hours A

Course content

The course builds on and expands the students' skills in financial theory and applications, focusing on asset/option pricing theory in particular. Assets include derivatives such as futures, forwards, swaps and options. This is used in analysing financial securities/instruments and real assets, and in project evaluation under uncertainty using real option analysis. We analyse the most common financial derivatives markets and its products. The course includes a description of technical and economic characteristics of project risk and an option-based valuation of flexibility in projects. The knowledge and theory is also applied to analysis of compound investment strategies and financial instruments.

Learning outcome

Position and function within the study program:
This is an elective course in the 8. semester of the MTIØT program, and is part of the qualification for the specialization in Financial Engineering. It builds on TIØ4145 Corporate Finance. We make use of the knowledge gained in the compulsory courses in mathematics, statistics and information technology, and in TIØ4117 Microeconomics. The course fits well with TIØ4317 Empirical and Quantitative Methods in Finance. It contributes to the learning objective of the MTIØT program, point 4.1, regarding Asset pricing models, Valuation and optimal exercise of financial and real options, and Financial risk measurement and management.

The course will convey the following knowledge:
- The theoretical foundation regarding project evaluation and asset pricing under uncertainty.

The course will develop the following skills:
- Training to think about general projects as a collection of real options.
- The students should aquire the skills necessary to analyse stylized projects under uncertainty, and to value and hedge cash flows coming from positions in common derivative financial securities.

Other important learning objectives:
- Give training in implementation of finacial models in spreadsheets and other relevant software.

Learning methods and activities

Lectures and exercises. The course language will be English if English speaking students are enrolled.

Compulsory assignments

  • Exercises

Further on evaluation

Portfolio assessment is the basis for the grade in the course. The portfolio includes a final written exam and a term paper. The results for the parts are given in %-scores, while the entire portfolio is assigned a letter grade.
If there is a re-sit examination, the examination form may change from written to oral.
For a re-take of an examination, all assessments in the portfolio must be re-taken.

Specific conditions

Exam registration requires that class registration is approved in the same semester. Compulsory activities from previous semester may be approved by the department.

Course materials

Assigned at course start.

Credit reductions

Course code Reduction From To
IF400 6.0 2017-09-01
SIS1020 7.5 2016-08-31
TIØ4146 3.7 2010-09-01

Timetable

Detailed timetable

Examination

Examination arrangement: Portfolio assessment

Term Statuskode Evaluation form Weighting Examination aids Date Time Room *
Spring ORD Work 20/100
Spring ORD Written examination 80/100 A
  • * The location (room) for a written examination is published 3 days before examination date.
If more than one room is listed, you will find your room at Studentweb.