University of Melbourne - FNCE10002: Principles of Finance (Solutions)

This subject introduces students to the key concepts of finance. Topics include: time-value-of-money, risk and return, present value, capital budgeting, diversification, asset allocation, capital asset pricing model, leverage, risk management and the types and sources of financing. This subject is the first in the sequence of finance subjects offered within the faculty and has a coverage and treatment of material which is suitable not only for students wishing to pursue further studies in finance but also for students from other disciplines who are interested in a single course in finance.

✔ On successful completion of this subject, students should be able to:

• Use financial mathematics to solve basic financial problems

• Apply alternative capital budgeting techniques for project evaluation purposes

• Explain the role of risk and return in the asset allocation decision and the pricing of risky assets

• Distinguish between the different sources of financing including short term debt, long term debt and equity

• Discuss the issues and choices involved in a firm’s capital structure decision

• Discuss the issues and choices involved in a firm’s distribution decision

• Explain how options can be used to manage basic financial risks

SUBJECT CODE

SUBJECT NAME

ACCT10001

Accounting Reports and Analysis

ACCT10002

Introductory Financial Accounting

ACCT20001

Accounting for Management Decisions

ECOM20001

Econometrics 1

ECOM30001

Basic Econometrics

ECOM30002

Econometrics 2

ECON10003

Introductory Macroeconomics

ECON10004

Introductory Microeconomics

ECON10005

Quantitative Methods 1

ECON20002

Intermediate Microeconomics

ECON20003

Quantitative Methods 2

FNCE20005

Corporate Financial Decision Making

FNCE30001

Investments

FNCE30007

Derivative Securities

FNCE40001

Advanced Corporate Finance

MAST10010

Data Analysis

MAST20005

Statistics