Category Archives: Announcements

Plan B for those who cannot attend Catherine Semcer’s talk tonight

Here’s a Plan B for those who have schedule conflicts with Catherine Semcer‘s talk tonight entitled “Saving Africa’s Wildlife: The Failure of Hunting Bans and Success of Entrepreneurial Solutions”. It turns out that Ms. Semcer was a featured guest on an EconTalk podcast episode hosted by Russ Roberts this past February. I am willing to accept a written report on Ms. Semcer’s EconTalk episode in lieu of a written report on her presentation tonight at Baylor.

The same rules apply for the podcast as they do for tonight’s live presentation. If you decide to take advantage of this podcast extra credit opportunity, I will use the grade you earn on your report to replace your lowest quiz grade in Finance 4335 (assuming that your grade on the extra credit is higher than your lowest quiz grade). The report should be in the form of a 1-2 page executive summary in which you provide a critical analysis of Russ Robert’s 67 minute interview with Ms. Semcer entitled “Poaching, Preserves, and African Wildlife”. In order to receive credit, the report must be submitted via email to fin4335in either Word or PDF format by no later than Monday, October 21 at 5 p.m.

Midterm 1 and Current Course Grades in Both Sections of Finance 4335

I just uploaded the midterm 1 grades, along with attendance, problem set, quiz, and current Finance 4335 course grades.

Here are the descriptive statistics for both sections of Finance 4335:

Midterm 1 Course
Mean 78.11 83.57
Standard Deviation 16.60 9.28
Minimum 34.00 62.92
25th percentile 70.00 77.81
50th percentile 81.00 85.08
75th percentile 91.50 89.97
Maximum 100.00 99.49

Although letter grades are not assigned until the semester is over, I recommend comparing your current course grade with the letter grade schedule given in the course syllabus and reproduced here:

A 93-100% C 73-77%
A- 90-93% C- 70-73%
B+ 87-90% D+ 67-70%
B 83-87% D 63-67%
B- 80-83% D- 60-63%
C+ 77-80%

If you are disappointed, particularly with your current grade situation in Finance 4335, keep in mind that these calculations do not take into account the fact that the final exam grade double counts in place of a midterm exam grade, if said midterm exam grade is lower than the final exam grade.

Readings and problem set due on Tuesday, 10/8

Class will begin on Tuesday, 10/8 with a quiz based upon the following assigned readings:

1. Moral Hazard & Adverse Selection (Doherty, Chapter 3)
2. Moral Hazard & Adverse Selection Synopsis, by James R. Garven
3. Moral Hazard and Insurance, by James R. Garven

Problem Set 5, which is based upon the insurance economics topic which we covered in class yesterday, is also due at the beginning of class next Tuesday.

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty.  Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden.  For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.  

Mea culpa concerning problem 2B in the first midterm exam

In problem 2B of the first midterm exam, the sentence I intended to write was: “Identify the lottery pairs from this list in which there is first-order stochastic dominance”. The answer provided in the solutions is the correct answer for that question, and for grading purposes, I will also give full credit for that response. However, the sentence I wrote (“Identify the lottery pairs from this list in which there is first-order stochastic dominance but not second-order stochastic dominance”) is confusing, since by definition, the mere presence of first-order stochastic dominance guarantees that there is also second-order stochastic dominance for all six lottery pairs, so I will also give full credit for that response. Thankfully, there can be no confusion concerning problem 2C which asks students to Identify the lottery pairs in which there is second-order stochastic dominance but not first-order stochastic dominance. Only the (3,1) and (3,2) lottery pairs fit the problem 2C criterion.

Hands-on Large-Cap Investment Course: Practicum in Portfolio Management

Overview:

Baylor has a student-managed investment fund comprised of large capitalization (large-cap) stocks which is now valued at approximately $8.4 million. Students in the class are directly responsible for managing the portfolio, while learning the techniques used by professionals to analyze and select individual stocks. Each student will also learn how to use Bloomberg, FactSet, Thomson Eikon and other resources commonly used in the investment management industry.

The Class:

Time: Mondays, 5:00-7:30pm
Location: Hodges Financial Markets Center
Structure: Designed in the format of a funds management firm and built around student participation

The course primarily consists of market sector teams preparing and presenting to the class detailed reports on stocks in their sector. Every class member is involved in the discussion of each stock. Following the presentation and discussion, the team makes a recommendation on the stocks they presented. The class votes and the decisions of the class are implemented.

For a better understanding of the course, you are welcome to sit through all or part of a class session this semester! Just come to the Financial Markets Center any Monday evening before 5:00pm and let the professor know you are there.

Professors:

  • ¬ Brandon Troegle, CFA®, is a Managing Director and portfolio manager with Hillcrest Asset Management, focusing on the firm’s securities selections across various strategies. Before joining Hillcrest, Brandon was an equity analyst at Morningstar. Prior to Morningstar, he worked for Luther King Capital Management and Bank of America.
  • ¬ David Morehead, CFA®, currently serves as Baylor’s Senior Director of Investments. Previously, he spent nearly 20 years investing across a wide range of securities including bank loans and high yield/distressed investments, equity and equity-linked products, commodities, and derivatives. His experience includes time on the sell-side as well as the buy-side with both long-only and hedged portfolio experience at Highview Capital, Ritchie Capital, William Blair, Bank of America, and First Trust Advisors.

How to Apply:

Complete the online application at https://www.baylor.edu/business/financialmarkets/apply.
In addition to the usual contact and background information you will need to provide:

  1. 1. Statements of why you wish to take the course and your career plans/goals
  2. 2. Description(s) of any investment and/or finance-related experience
  3. 3. A description of a significant academic and/or personal achievement you would like the selection committee to consider
  4. 4. Uploaded copies of your current resume and current unofficial transcript

The online application will be available from 10am Monday, October 7th until 10pm Thursday, October 24th.

Enrollment is limited to 15 students, graduate and/or undergraduate, each with a minimum 3.2 GPA, a strong academic record and an interest in investments. Applicants will be evaluated by a Finance faculty committee.

For More Information go to: http://www.baylor.edu/business/financial_markets

Midterm Exam 1 Booklet and Solutions

The Midterm Exam 1 Booklet and Solutions are now available for downloading from the course website.

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty.  Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden.  For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.  

Important notice concerning Section III.C.16 of Baylor’s Honor Code Policy and Procedures document

It has come to my attention that past problem set and exam solutions for Finance 4335 are available online on sites such as Quizlet, Coursehero, and Chegg.   These documents were uploaded to these sites without my knowledge or permission and as such, constitute theft of intellectual property.

According to Section III.C.16 of Baylor’s Honor Code Policy and Procedures, using, uploading, downloading, or purchasing any online resource that has been derived from material pertaining to a Baylor course without the written permission of the professor constitutes dishonorable conduct; i.e., an act of academic dishonesty.  Section IV.A. of the same document obligates faculty members who suspect that a student has engaged in dishonorable conduct of this sort to either handle the matter directly with the student or refer it to the Honor Council.

While y’all are encouraged to use course-related documents that I distribute in class and on the course website for personal academic purposes,  anything other than your personal use of these documents is in violation of Section III.C.16 of Baylor’s Honor Code Policy and Procedures and therefore, expressly forbidden.  This also applies to the use of course-related documents from any other source other than me.

I will close by citing the “Academic Honesty and Integrity” section of the Finance 4335 course syllabus:

Plagiarism or any form of cheating is not acceptable. Baylor’s honor code is an important resource for understanding various types of academic dishonesty, and I expect my students to be intimately familiar with it. The standards set forth in the honor code will be applied to all of your work in Finance 4335.

Cheating involves not only a breach of trust that disrupts the proper harmony of society and creation, but it is also an act of violence against one’s soul, corrupting judgment by sanctioning a distorted notion of success and honing destructive tools to pursue it.

Erratum: new formula sheet and some information about the exam

I found a typo and realized that I had left a couple of equations out of the formula sheet, so I just uploaded what is presumably the final version of the formula sheet for Midterm Exam 1. This formula sheet consists of the following 6 sections:

  1. Expected value and variance
  2. Expected utility
  3. Certainty equivalent of wealth and risk premium
  4. Stochastic dominance rules
  5. Expected return and standard deviation: 2-asset portfolio
  6. Standard normal distribution and z statistic

While I have your attention, here’s some information about the exam itself:

  1. This exam consists of two sections. Section 1 consists of eight multiple choice questions worth 4 points each, whereas Section 2 consists of three problems worth 32 points each.
  2. Students are required to either complete Section 1 multiple-choice questions and two out of three Section 2 problems, or to ignore Section 1 and complete all three Section 2 problems. For students who complete all of Sections 1 and 2, I will count the three highest scoring questions and/or problems toward the exam grade.
  3. The maximum number of points possible on this exam’s questions and problems totals 96, and I will add an additional 4 points on your exam if you legibly write your name on the cover page in the space provided. Thus, the maximum number of points possible on this exam is 100 points.
  4. You may have the entire class period in order to complete this examination.

Formula sheet for Midterm Exam 1

The formula sheet for Midterm Exam 1 is now available at http://fin4335.garven.com/fall2019/formulas_part1.pdf. This document, along with the Standard Normal Distribution Function (“z”) Table, will be appended to the back of the midterm 1 exam booklet that y’all will get to see for the first time on Tuesday.

Restrictions on Use: Section III.C.16 of Baylor’s Honor Code Policy and Procedures stipulates that using, uploading, or downloading any online resource derived from material pertaining to a Baylor course without the written permission of the professor constitutes an act of academic dishonesty.  Since Professor Garven gives no such permission for Finance 4335 course content, this means that the use and redistribution of Finance 4335-related documents involving any source other than Professor Garven are expressly forbidden.  For more information on the use restrictions of Finance 4335 course content, see http://bit.ly/4335honorcode.