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FIN 2704/X

Module Overview

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Module objectives
• Provides the foundations to understand the key
concepts and tools used in Finance

• Provides a broad overview of the financial

environment under which firms operate

• Introduces the conceptual and analytical skills

necessary to make sound financial decisions

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Content delivery
FIN2704/2704X (FIN2004/2004X)
• 1 module, same materials, 1 distribution

Lectures
• Weekly pre-recorded videos (posted 1 week prior to the
lecture session in which the topic will be discussed)
• Weekly live virtual lecture conducted on Zoom during your
registered lecture section
– LA1 (Tuesdays 10 am – noon)
– LA2 (Tuesdays 14:00 – 16:00)
– LA3 (Tuesdays 16:00 – 18:00)
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Content delivery

Tutorials
• Weekly face-to-face tutorial conducted by your tutors
– Virtual attendance is allowed with valid reasons.
– Please notify your tutor a day before if you need to
attend virtually.
• Attendance will be part of your participation mark

Please make sure that you have registered for a

tutorial section
Note: All module registration matters are handled by the BBA
Office
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Course materials
• Textbook: Fundamentals of Corporate Finance, 12th edition
By S.A. Ross, R.W. Westerfield, B.D. Jordan
Note: Older version(s) can be used but you’re responsible for checking for
consistency

• Financial calculator: Texas Instruments BAII Plus Financial

Calculator is recommended

• Materials posted on LumiNUS:

– Course syllabus
– Zoom lecture slides
– Pre-recorded videos & slides
– Tutorial questions
– Select articles
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Assessments
Component Weight
Quiz (best 2 of 3) 15% During your registered
Tutorial Class Participation 10% tutorials
During your registered
Midterm: Week 7 30% lecture time in week 7
Final exam 45% During final week
Total 100%

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Quizzes
• Three quizzes held over the course of the semester
– Best 2 out of 3
– No make-up quizzes

• The quizzes will take place during your tutorial session

NOTE: you will only receive credit for quizzes
completed during your assigned tutorial section

• All tutorial quiz marks from each tutorial section may be

normalized at the end of the semester, such that all tutorial
sections will have the same average mark
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Tutorial class participation

• Tutorials will be conducted in-person (face-to-face) on campus.

• Your tutorial class participation mark will be allocated by your tutor

based on:
– Tutorial attendance
– Participation in class discussion
– Tutorial presentations (if presentations are assigned by your tutor)
• Do the tutorial problems prior to the scheduled tutorial session

• You will only receive credit for participation made in the specific tutorial
section that you are registered for.
You must attend your registered tutorial section and only that
section
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Midterm test & final exam

• Midterm will take place in Week 7 during your registered
lecture time
NOTE: you will only receive credit for midterm
completed during your registered lecture session

• Final exam will take place during the final week as

scheduled by the University
– The materials covered in the final exam are cumulative

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Midterm test (cont.)

• Remote digital assessment using Examplify and Zoom
invigilation
– No backward navigation, randomized questions,
randomized answer options

• MCQs

• Same number of questions, same length of time, same

difficulty level
– NOT the same questions
– Midterm will not be exactly the same as quizzes & tutorial
questions

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Discussing test, exam, and quiz questions

before, during, and after the test/exam/quiz
with other students constitutes
academic dishonesty (cheating)

Please see the module outline for policy on academic

dishonesty

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How to use Examplify

If you are new to Examplify or have had problems with Examplify, attend one of
Examplify briefing sessions arranged by CIT
https://wiki.nus.edu.sg/display/DA/Common+Briefing+Sessions
NOTE: I highly recommend that you attend one of the sessions in Round 1 (before
our midterm)

If none of the above options is possible:

https://wiki.nus.edu.sg/display/DA/Getting+Started
– Go through the briefing slides
• Examplify Assessment - https://wiki.nus.edu.sg/x/daBJCw
• Performance Assessment - https://wiki.nus.edu.sg/x/nI4FEQ
– Or watch the briefing video - https://wiki.nus.edu.sg/x/tgg_EQ
– Take a few practice exams
Write to citbox25@nus.edu.sg if you run into any technical issues

You are responsible for familiarizing yourself

with Examplify before our midterm 13

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Lecture
• View a set of pre-recorded lecture videos before attending the
weekly live virtual lecture
– Pre-recorded lecture videos will be posted on LumiNUS (under
“Multimedia”) approx. 2 weeks before the virtual lecture

• What happens if you have questions after watching the lecture

videos?
– Submit your question via PollEV (see next slide)

• Attend the weekly live Zoom lecture

Please attend your registered lecture section

and only those sections
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How do you ask questions

on the weekly topics?
Submit your questions ahead of time via PollEv
– Go to pollev.com/sulaeman
– Things to remember:
1. Login using your NUS email address
2. Use the name on your NUS ID
3. Post a question on the topic of the week
OR
4. Vote for the question you would like me to answer during
lecture

Deadline: All questions must be submitted before 8 am on

Monday every week
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Why submit a question via PollEv?

• It will greatly help me gauge your understanding of

the topic of the week

• This is a chance for you to tell me the materials

that you are unclear about
– I will clarify relevant materials during the weekly live
Zoom lecture

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How to contact your instructor

Email works best
– deserina@nus.edu.sg
– In the subject of your email include “[FIN2004/2704 your
section]”
• E.g., [FIN2004/2704 LA1] How do I find Week 1 lecture videos

I will try my best to respond to your email within 72

hours.

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FAQ
1. Who should I contact if I have a question?
Ask Deserina
- Module management Ask your tutor
- Lecture: videos, slides - Materials covered in
- Midterm test FIN2704/X - Tutorial questions
management - Sample midterm papers - Tutorial slides
- Final exam management posted on LumiNUS - Quizzes
- Sample final papers - Tutorial management
posted on LumiNUS

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FAQ (cont.)
2. Since you have 3 different midterm tests, won’t some (i.e.,
my) section be disadvantage somehow?
– The medians of the midterm marks for all lecture
sections are the same.
3. Won’t [FIN2704 or FIN2704X] students will be
disadvantaged since you are using 1 distribution?
Total Marks Distribution
80%
70%
Percentage of students

60%
50%
40% 2704
30% 2704X
20%
10%
0%
Total marks

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FAQ (cont.)
4. Do I need to attend the weekly live virtual lecture?
– Lecture attendance is positively correlated with
midterm mark and final exam mark

6. Do you have office hours?

- Please reach out via email (Deserina@nus.edu.sg)

5. Any tips on how to do well in this module?

– See next slide

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Tips on how to do well in this module

1. Watch the weekly pre-recorded videos before we
cover the topic in the Zoom lectures and tutorials
• Submit a question via PollEv before Monday 8 AM

2. Pause and re-wind the pre-recorded videos if

needed

3. Have a copy of the slides while viewing the videos

and use them to take notes

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Tips on how to do well in this module

4. Attend lectures and tutorials
• Attendance is positively correlated with quizzes,
midterm, final exam marks

5. Ask your tutor

6. Study with your peers

• Different perspectives
• By helping one another, you will gain a better
understanding of the materials. Trust me!

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FIN 2704/X

Week 1 Review
(Financial Management)

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Financial Management
Financial markets vs. financial
intermediaries
– Do investors invest directly in financial markets
or through financial intermediaries?

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Business Organization

1. Sole proprietorship
2. Partnership Increasing
in
• Limited Partnership complexity
and costs
• Limited Liability Partnership (LLP)
3. Corporation

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Corporation
• The goal of the firm is to maximize its value

• Firm value
• Market price
• Intrinsic value
– Not directly observable
– Market participants may disagree

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Corporation
• The goal of the firm is to maximize its value
Corporate structure (Week 1 slide 33)

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Corporation (cont.)
• Separation of ownership and management
• Conflict of interests

• Maximizing firm value, done through:

- Capital budgeting
- Capital structure
- Debt vs. equity
- Working capital management

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Financial markets
• Money Markets:
– Short-term debt

• Capital Markets:
– Long-term assets
• Equity
• Long-term debt

• Primary markets vs. secondary markets

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Dealer vs. Auction Markets

• Auction market: the highest bidding price is matched with

the lowest asking price
Example:
– BID: Investor 1 wants to buy Company XYZ stocks at $9.80,
Investor 2 wants to buy Company XYZ stocks at $9.70,
– ASK: Investor 3 wants to sell Company XYZ stocks at $9.75,
Investor 4 wants to sell Company XYZ stocks at $9.85.

• Dealer market: network of dealers

– Objective of traders in auction and dealer markets is the
same (to pay the least and receive the most)
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Dealer vs. Auction Markets

• Auction market: the highest bidding price is matched with
the lowest asking price
Example:
– BID: Investor 1 wants to buy Company XYZ stocks at $9.80,
Investor 2 wants to buy Company XYZ stocks at $9.70,
– ASK: Investor 3 wants to sell Company XYZ stocks at $9.75,
Investor 4 wants to sell Company XYZ stocks at $9.85.

• Dealer market: network of dealers

– Objective of traders in auction and dealer markets is the
same (to pay the least and receive the most)

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Other
• Shares and stocks are used interchangeably.
– If you purchase a share of a company, you are (one of)
the owner of that company.
• Bonds is debt.
– If you purchase a bond that means you are a
debtholder.
• A security is a tradable financial assets
– Can be bonds, stocks, options.

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Week 1
List of topics
Note:
You are responsible for all materials covered in the pre-
recorded videos posted on LumiNUS, unless they are
marked “not examinable”. This list only serves to help you
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Week 1 topics
• What is Finance?
– Investments
– Financial markets and intermediaries
– Corporate finance

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Week 1 topics (Cont.)

• Investment vehicle model
• Firm’s decisions:
– Investment decisions
– Financing decisions

• Forms of business organization

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Week 1 topics (Cont.)

Corporation
• Structure
• Private vs. Public
• Sources of external financing
• Goal of a corporation
– Intrinsic value vs. market price
• Financial managers
• Agency problem
• Agency costs
• Corporate governance
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Week 1 topics (Cont.)

• Financial markets
– Money vs. capital markets
– Primary vs. secondary markets
– Dealer vs. auction markets

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