Department of Finance and Banking

Faculty of Business Studies

Begum Rokeya University, Rangpur.
Master of Business Administration (MBA) Syllabus
Session: 2018-19
 Department of Finance and Banking
Faculty of Business Studies
Begum Rokeya University, Rangpur.
Master of Business Administration (MBA) Syllabus
Session: 2018-19
Course
Semester Course Title Credit Hour
Code
FIN 5101 Development Finance 3 (Three)
FIN 5102 Foreign Exchange Management 3 (Three)
1st Semester FIN 5103 Econometrics 3 (Three)
FIN 5104 Corporate Governance and Restructuring 3 (Three)
FIN 5105 Corporate Banking and Financial Services 3 (Three)
FIN 5201 Operations Research 3 (Three)
FIN 5202 Business Forecasting 3 (Three)
FIN 5203 Modern Finance Theory 3 (Three)
FIN 5204 Bank Fund Management 3 (Three)
2nd Semester
FIN 5205 Financial Modeling 3 (Three)
FIN 5206 Viva-Voce 3 (Three)
FIN 5207 Research Paper 3 (Three)
 MBA 1st SEMESTER

FIN 5101 Development Finance

Development approaches of the different types of economics; growth models; pattern of

financing Development; domestic resources; saving and investment; external finance; sources of
external finance multinational Development institutions; regional Development institutions;
 NGO; bilateral agreements between countries; types of external finance; technologies used-local
and foreign; Development finance in rural and urban areas; experience of Development finance
of some selected developing countries with special reference to Bangladesh.
References:
i. Economic development Todaro.
FIN 5102 Foreign Exchange Management

1. Introduction: Meaning of foreign exchange, Fundamentals of foreign exchange, Administration of

foreign exchange in Bangladesh.

2. Methods for Settlement of International Payments: Foreign accounts of banks: Nostro a/c,
Vostro a/c, Loro a/c; other means of international payments; travel transactions; methods of settling
debts in international trade, Asian Clearing Union, SWIFT, Offshore Banking.
3. Exchange Control: Objectives of exchange control; Methods of exchange control; Exchange
control in Bangladesh.
4. Exchange Rate Determination: Theories of exchange rate determination: Mint par theory,
purchasing power parity theory, Balance of payment theory; Causes of fluctuations in exchange rats;
5. Foreign Exchange Market: Definition, transactions in foreign exchange market, activation of forex
market, functions: Hedging, speculation, arbitrage; Spot and forward market; foreign exchange
market in Bangladesh.
6. Foreign Exchange Arithmetic: Ready exchange rate-cross & non-trade; Forward rate, Execution,
cancellation/ extension of forward rate; inter-bank deals.
7. Foreign Exchange Risk: Financial Derivatives; Methods of exchange risk management, Dealing
posting, accounting and reporting, risk associates with forex dealing.
8. Foreign Trade Contract and Documents: Incoterms; Letter of Credit (LC)- meaning, mechanism,
types and operation; Documents used in foreign trade.
9. Financing in Foreign Trade:
i. Import Procedure and financing: Chronological steps of import; payment against
documents (PAD); Loan against Imported Merchandise (LIM), Loan against trust receipt
(LTP)

ii. Export procedure and financing: General procedure of export; pre-shipment finance:
Packing credit, Hypothecations, pledge, export trust receipt; Advance under ‘Red clause’
L/C; Post shipment finance; incentives to exporters;

10. International Financial Institutions: Background; IMF; IBRD; IFC; IDA; MIGA; ICSID; ADB;
IDB.
Texts References:
i. A textbook on Foreign Exchange by L. R Chowdhury 2nd edition, Fair Corporation.

ii. Foreign Exchange: Practice, concept and control by C. Jeevanandam, Sultan Chand & Sons.

FIN 5103 Econometrics

Econometrics: The nature of Regression Analysis; Two-Variable Regression Analysis; Some
Basic Ideas; The Normality Assumption; Classical Normal Linear Regression Model; Two
variable Regression ; Interval Estimation and Hypo-thesis Testing; Multiple Regression
Analysis; The Problem of Estimation; Multi-collinearity; Heteroscedacity; Auto-correlation;
Model specification; Regression on dummy Variable; Auto Regressive and Distributed lag
models; Introduction to Simultaneous-Equation Models

Time Series Econometrics.

References books:

Basic Econometrics: Damodar N. Gujrati, Latest edition.

Aigner, D.S Basic Econometrics, Prentice Hall.
Dhrymes, Phoebus J. introductory to Econometrics, Spring verlag, New York, 1978.

FIN 5104 Corporate Restructuring and Governance

1. Introduction: Concept, types and strategies, compulsory Vs voluntary restructuring, restructuring

the authority, restructuring creditors’ claim, restructuring employees’ claim, corporate environment:
 Business and legal.
2. Corporate Governance in the Eye of Stakeholder: Shareholders/investors, employees, customers,
suppliers, trading, partners, Community and environment and the State.

3. New approaches and Legal Framework to Corporate Governance: Five golden rules, Corporate
Governance as an integral part of strategy process, internal and external analysis, stakeholder
analysis, formulating strategy and implementation.
Laws governing mergers, acquisitions and tender offers, securities laws, business judgment rule,
Antitrust laws, regulation of insider trading. Growth synergy, diversification and hypothesis of
takeovers.

4. Merger and Acquisition and Takeover: Takeover Vs merger, Takeover process, legal and
regulatory framework, financial framework of merger decision, requirements for takeover offer,
withdrawal of offer, tender offer. Concept of merger and Acquisition, types of merger, merger as a
capital budgeting decision, schemes of merger and amalgamation, income tax and amalgamation,
accounting for merger and acquisitions.
5. Corporate Restructuring: Divestitures, Voluntary Liquidation, Restructuring of the 1990s.
6. Restructuring in Bankruptcy: Business failure, costs, reorganization vs liquidation, prepackaged
bankruptcy, corporate control and default liquidation and investing in distressed companies.

7. International Merger and Acquisitions: Concepts and significance, strategies and processes,
leveraged buyouts, international takeover.
8. Strategies for Creating Value: Concepts and significance of Creating value, closing the Value
Gap, Foundations of Value Creations, Methods of Measuring Required market return.
9. Corporate Governance: Concepts and significance of corporate governance, essential requirements
of a good corporate governance benefits of good corporate governance, structuring of good
corporate governance, parties involved in a corporate governance, corporate governance and ethical
standards.

10. Practices of Corporate Governance in Some countries: Bangladesh, India, Germany, Canada.

Basic Text Books:

i. Corporate Restructuring: Managing the change process from within by Gordon Donaldson.
ii. Creating value through corporate restructuring: case studies in bankruptcies… by Stuart C.
Gilson.
iii. Corporate Restructuring: finance in times of crisis: by Michael Blatz, Karl-j, Krarus, Sascha
Haghani
iv. Corporate Governance by Robert A. G. Monks, Nell Minow
v. The recurrent crisis in corporate governance by Paul. W. MacAvoy, Ira M. Millstein.
vi. Real-World corporate governance, Kendall, Nand Kendall, A; Pitman Publishing, 1998.

FIN 5105 Corporate Banking and Financial Services

1. The Core concept of banking: The competitive environment in developed and emerging
markets domestically and internationally, The key success factors in banking, Corporate
banking, SME banking, Retail banking, The profitability of different banking products,
How clients look at banks.

2. Corporate Banking Products & Services: Debt Products, Liability Products, Trade
Products - Overview, Treasury Products, Project Finance & Debt Syndication,
Securitization & Distressed Debt.

3. Relationship Management: The RM Process – Client Segmentation & Prospecting, The

RM Process – Analysis & Structuring, RM Strategy.

4. Transaction Banking: Introduction to Transaction Banking, Types of Trade Transactions,

Letter of Credit, Trade Finance, Bank Guarantees, Cash Management Services, Pricing
Transaction Banking Products.

5. Building an efficient corporate banking organization/Division: Defining strategic

business units

6. Choosing the right organization structure, Client segmentation, Regional approach, Product
approach, Matrix organization, Designing and managing the distribution network, Efficient
client relationship management, Improving cross selling, Success factors for the
international banking business.

7. Building a competitive product range: From corporate lending to cash flow based
lending, Understanding the economics and the risk profile of the corporate baking product
portfolio, Asset based lending, Investment banking services, How to successfully build a
portfolio of structured products.

8. Measuring product and client profitability: Introduction to the different concepts of

measuring success and profitability, Revenues/volume/risk weighted asset, ROI/ROE/ROA,
RAROC/RORAC, EVA, Calculating the profitability on all bank levels, the concept of risk
adjusted pricing, Calculating the minimum pricing for products, Dealing with loss leaders.

9. Dealing with risk: Introduction to risk in corporate banking in Developed markets and
Emerging markets, Basel II changed the perception of risk, assessing risk in the different
banking sectors, Identifying, analyzing and managing risk categories, Credit risk, Market
risk, Liquidity risk, Operational risk, Business/reputation risk, Employing risk mitigating
factors.

10 Mastering credit risk: Establishing a rating system for corporations, Defining ratings for
. corporations, Qualitative assessment, Qualitative ratios, Defining ratings for structured
lending products, The credit approval process, The appropriate approval level, Credit
committees vs expert structure, portfolio responsibility, Establishing an early warning
system, Enhancing cooperation between sales force and credit department.

11 Improving the credit decision process: Segregation of duties in the loan underwriting
. process, Defining the appropriate approval level for loans, The governance of credit
committees, Alternative route: credit decision by an expert system, Joint portfolio
responsibility, Reducing costs in the credit decision process.

12 Introduction to portfolio management: Role and responsibility of the risk management

. department, Establishing risk-limit systems, Rules of engagement between the departments
 involved, Introducing a loan transfer system, Applying risk mitigating factors by active
portfolio management, Establishing a value creating management information system.

13 E-banking-An Introduction: Concept, Use of Computers in Banks, E-Banking Vs Internet

. Banking, Emergence of E-Banking, Structure, ATM. PC home banking, Internet Banking,
Types of internet banking, Challenges of E-Banking, Automated Clearing House (ACH),
Inter Brach Reconciliation, Electronic document and fund transfer in Bangladesh: SWIFT
and other technologies, Electronic Payment System (EPS), Electronic Data Interchange
(EDI), Electronic Fund transfer (EFT)

Basic Text Books:

i. Giacoma De Laurentis (2005), Strategy and Organization of Corporate Banking, Springer.

ii. Corporate Lending and Securities by Chris Parry and Iain MacNeil and Mark Largan.

iii. Materials from Bangladesh banking sector delivered by the instructor.

 MBA 2nd SEMESTER

FIN 5201 Operations Research

1. Introduction: Introduction, Origin and Historical Development of OR, Importance of OR,
 Objectives of OR, Characteristics of OR, Scope of OR, Models of OR, Phases of Advantages of
OR, Limitations of OR, Usefulness of OR in Bangladesh.
2. Model Formulation: Developing model, Typical Model orientation, Cost Output Model,
Break-Even Model, Demand- Supply Equilibrium Model, Forecasting Model, Inventory Model.
3. Basics of System Analysis: Review of LP, Duality of LP, Formulation of dual, Formulation of
dual when the primal has mixed constraints, Application of duality, Economic interpretation of
optimal solution of dual problem Sensitivity analysis of LP, Range of feasibility, Optimality,
insignificance, Shadow Prices and their Economic Interpretation.
4. Transportation Problem: Introduction, Mathematical model of Transportation Problem, types
of Transportation Problems, Methods of Solving the Transportation Problems: Initial Feasible
Solution Methods – North-West Corner Rule, Minimum Cost- Cell Method, Vogel’s
Approximation Method (VAM)/ Penalty Method, Optimal Solution Methods - Stepping Stone
Method and MODI Method, Transshipment Problem.

5. Assignment Problem: Introduction, Mathematical formulation of assignment problem, Types

of assignment problem, Methods of Solving the Assignment Problems: Hungarian Assignment
Method (HAM), Special Situations of Assignment Problem, Computer solution method.

6. Queuing Theory (Waiting line Theory): Introduction, Object of Queuing Theory,

Characteristics of Queuing Model, Assumptions of Queuing Model, Classification of Queues,
Queues Discipline, Single channel and Multiple Channel of Queuing Model, Limitations of
Queuing Theory.

7. Network Analysis: Project Scheduling: Introduction, Rules of network construction, Spanning

tree Method, Shortest Route, Maximum Flow Method, Applications of Project Management,
CPM (Critical Path Method): Computing ES, EF, LS and LF Times, Concept of Critical Part.
Computing Activity Slack Time, Determination of Critical Part. PERT (Program Evaluation and
Review Technique): Expected Project Completion time, Variance of Expected Project time,
Probability of certain Project Completion Time, Project Completion with Certain Probability
Advantages and Limitations of CPM & PERT, Crashing of the Project Networks: Time- Cost-
Trade – off, Budgetary Control.

8. Sequencing Model: Introduction, Sequencing Problems, Processing jobs thought Machines:

Processing jobs thought two machines, Processing jobs though three machines, Routing
Problems in Network.

9. Replacement Theory: Introduction, Replacement of capital equipment that deteriorate with

time, Replacement of items failing completely, Staffing problem.

10. Game theory: Introduction, Basic terminologies of game theory, Assumptions of game, Types
of Games, Solution Systems of Game Problems: Game with Pure Strategies, Dominance
Property of Game.

11 Linear Programming (LP) Meaning: Developing an LP model- Defining the decision

variables, the objective function and the constraints: Application of LP in solving product- mix
problem, Diet problem Blending problem, Scheduling problem, Transportation problems,
investment planning. Production and inventory planning, solution of LP maximization and
minimization problem using graphical method and simplex method; Duality for liner
programming; Shadow price and their interoperations; Post optimality analysis; Special
Application of Linear programming – Transportation model. Assignment model.

12 Simulation: Simulation methodology; Modeling probalistic variables: Validation of simulation

model; Design of simulation experiments; Evaluation of simulation Results.
 Basic Text:
i. Anderson, DR., Sweeney, D.S. and Williams, T. (2012): An Introduction to Management
Science

Reference Books:
i. Render, B.; Stair, R. M. Jr., Hanna, M. E. and Badri, T .N. (2012), Quantitative Analysis
for Management

ii. Stevenson, W (2012), Management Science

iii. Quantitative Approaches to Management; Richard I Lenin/ Charles A Kirkpatrick/David S
Rubin.

FIN 5202 Business Forecasting

Business forecasting and business decision, Forecasting methodology: Smoothing, Interpreting
Information flows, Time Series and Extrapolation, Liner and Multiple Regression. Probabilistic
forecasting and decision analysis hniqucs. Bench mark forecasting, Causal model of cost and demand.
Forecasting the environment in economy.

Introduction to Forecasting: History of Forecasting, Need for Forecasting, Types of Forecasts,

Macroeconomic Forecasting Choosing a Forecasting Method, Forecasting Steps, Managing the
Forecasting Process, Computer Forecasting Packages, Forecasting Example, Summery, Case
Study 1.1: Mr. Tux, Case Study 1.2: Consumer Credit Counseling, Minitab Applications, Excel
Applications

Exploring Date Patterns and Choosing A Forecasting Technique: Exploring Time Series
Data Patterns, Exploring Data Patterns with Autocorrelation Analysis, Are the Date Random? Do
the Date Have a Trend? Are the Date Seasonal? Choosing a Forecasting Technique, Forecasting
Techniques for Stationary Date, Forecasting Techniques for Date with a Trend, Forecasting
Techniques for Date with Seasonality, Forecasting Techniques for Cyclical Series, Other Factors
to Consider Choosing a Forecasting Technique Empirical Evaluation of Forecasting Methods,
Measuring Forecasting Error, Determining the Adequacy of a Forecasting Technique,
Application to Management, Glossary, Key Formulas, Problem, Case Study 3.1: Murphy
Brothers Furniture, Case Study 3.2: Mr. Tux, Case Study 3.3:Consume Credit Counseling, Case
Study 3.4: Alomega Food Stores, Minitab Applications, Excel Application,

Moving Averages and Smoothing Methods: Naive Models, Forecasting Methods Based on
Averaging, Simple Averages, Moving Averages, Double Moving Averages, Exponential
Smoothing Method, Exponential Smoothing Adjusted for Trend Holt’s Method, Exponential
Smoothing Adjusted for Trend and Seasonal Variation Winters Method, Application to
Management, Glossary, Key Formulas, Problem, Case Study 4.1: The Solar Alternative
Company, Case Study 4.2: Mr. Tux, Case Study 4.3: Consumer Credit Counseling, Case Study
4.4: Five-Year Revenue Projection for Downtown Radiology, Minitab Applications, Excel
Application

Time Series and Their Components: Decomposition, Trend, Additional Trend Curves,
Forecasting Trend, Seasonality, Seasonally Adjusted Data, Cyclical and Irregular Variations,
Forecasting a Seasonal Time Series, The Census II Decomposition Method, Application to
Management, Appendix: Price Index, Glossary, Key Formulas, Problem, Case Study 5.1: The
Small Engine Doctor, Case Study 5.2: Mr. Tux, Case Study 5.3: Consumer Credit Counseling,
Case Study 5.4: AAA Washington, Case Study 5.5: Alomega Food Stores, Minitab Applications,
Excel Application

Simple Linear Regression: Regression Line, Standard Error of the Estimate, Forecasting,
Decomposing of Variance, Coefficient of Determination, Hypothesis Testing, Analysis of
Residuals, Computer Output, Variable Transformations, Application to Management, Glossary,
Key Formulas, Problem, Case Study 6.1: Tiger Transport, Case Study 6.2: Butcher Products. Ins,
Case Study 6.3: Ace Manufacturing, Case Study 6.4: Mr. Tux, Case Study 6.5: Consumer Credit
Counseling, Minitab Applications, Excel Application

Multiple Regression Analysis: Several Predictor Variable, Correlation Matrix, Multiple

Regression Model, Statistical Model for the Regression, Interpreting Regression Coefficients,
Inference for Multiple Regression Models, Standard Error of the Estimate, Significance of the
Regression, individual Predictor Variable, Forecast of a Future Response, Computer Output,
Dummy Variables, Multicollinearity, Selecting the “Best’’ Regression Equation, All Possible
Regressions, Stepwise Regression, Final Notes on Regression, Regression Diagnostics and
Residual Analysis, Forecasting Caveats, Over fitting, Useful Regressions Large F Ratios,
Application to Management, Glossary, Key Formulas, Problems, Case Study 7.1: The Bond
Market, Case Study 7.2: Fantasy Baseball (A), Case Study 7.3: Fantasy Baseball (B), Minitab
Applications, Excel Application

The Box-Jenkins (ARIMA) Methodology: Box-Jenkins Methodology, Autoregressive Models,

Moving Average Models, Autoregressive Moving Average Models, Summary, Implementing the
Model-Building Strategy, Step 1: Model Identification, Step 2: Model Estimation, Step 3: Model
Checking, Step 4: Forecasting with the Model, Final Comments, Model Selection Criteria,
Model for Seasonal Data, Simple Exponential Smoothing and an ARIMA Model, Advantages
and Disadvantages of AMIMA Models, Application to Management, Glossary, Key Formulas,
Problems, Case Study 9.1: Restaurant Sales, Case Study 9.2: Mr. Tux, Case Study 9.3:
Consumer Credit Counseling, Case Study 9.4: The Lydia E. Pinkham Medicine Company, Case
Study 9.5: City of College Station, Case Study 9.6: UPS Ari Finance Division, Minitab
Applications, Excel Application

Managing the Forecasting Process: The Forecasting Process, Monitoring Forecasts,

Forecasting Steps Reviewed, Forecasting Responsibility, Forecasting Costs, Forecasting and the
MIS System, Selling Management on Forecasting, The Future of Forecasting, Case Study 11.1:
Boundary Electronics, Case Study 11.2: Busby Associates, Case Study 11.3: Consumer Credit
Counseling, Case Study 11.4: Mr. Tux, Case Study 11.5: Alomega Food Stores, References and
Selected Bibliography, APPENDIX A Derivations, APPENDIX B Data for Case Study 7.1,
APPENDIX C Tables, APPENDIX Data Sets and Databases, Index

FIN 5203 Modern Finance Theory

1. Introduction to Finance: Financial decisions of households and corporations, unifying principles

of Finance, Approaches to valuation of financial and real assets, Roles of financial markets,
 objectives of corporate financial managers.

2. Capital Markets, Consumption and Investment: Consumption and investment without capital
markets, Consumption and investment with capital market, marketplaces and transaction costs,
Transaction costs and the breakdown of separation.

3. Investment Decision: the Certainty Case: Fisher Separation, the Agency Problem, Maximization of
shareholders’ wealth, Techniques for capital budgeting, Comparison of Net Present Value with
Internal Rate of Return, Cash flows for capital budgeting purposes.

4. Advanced Capital Budgeting Issues: Capital budgeting techniques in practice, Projects with
different lives, constrained capital budgeting problems, Capital budgeting procedures under
inflation, Term structure of interest rates. Externality Management. Flow to Equity Approach,
Adjusted Proposal Value Method concept of free case flow.

5. The Theory of Choice: Utility Theory Given Uncertainty: Five Axioms of choice under
uncertainty, Developing utility functions, Establishing a definition of risk aversion, Comparison of
risk aversion in the small and the large, Scholastic dominance, Using mean and variance as choice
criteria, Mean variance paradox, Recent thinking and empirical evidence.

6. State Preference Theory: Uncertainty and alternative future states, Definition of pure securities,
Complete capital market, Derivation of pure security prices, No arbitrage profit condition,
Economic determinants of security prices, Optimal portfolio decisions, portfolio optimality
conditions and portfolio separation, Firm valuation, The Fisher Separation principle, Optimal
investment decisions.

7. Portfolio Theories and Analysis: Mean-variance Portfolio Analysis and CAPM, Derivation of
CAPM, Using CAPM for valuation- single period uncertainty, The problem of measuring
performance – Roll’s Critique, Portfolio demand, the Separation Theorem, Market equilibrium: The
capital asset pricing model (CAPM), Applications in corporate finance, Arbitrage Pricing Theory
(APT), Factor model of asset returns, Implications of APT.

8. Contingent Claims Pricing and Theories: Forward and Futures definitions, Futures prices in a
rational expectations framework, Option Pricing and Risk-Neutral Valuation, The Black- Scholes
model and the pricing kernel, Extensions and applications, Combining options, Pricing American
and European options.

9. Capital Budgeting Under Uncertainty: The Multi period Case: Multi period capital Budgeting
with Imperfect markets for physical capital, An examination of admissible uncertainty in a multi
period capital asset pricing world, Using APT in Multi period capital Budgeting, comparing risky
cost structures, abandonment value.

10 Capital Structure and the Cost of Capital Theory: The value of the firm given corporate taxes
. only, the value of the firm in a world with both personal and corporate taxes, introducing risk- a
synthesis, of M-M and CAPM, the cost of capital with risky debt, the maturity structure of debt, the
effect of other financial instruments on the cost of capital.

11 Mergers, Restructuring and Corporate Control Theories: Corporate restructuring and

. Corporate, recent developments in M&A activities, Theories of M&A activities, Theories of
restructuring, Conglomerate mergers.

12 Behavioral Finance- Basic Concepts and Theories: Information perception and intertemporal
. choice, Human preferences, rationality, and market efficiency, Behavioral factors and financial
markets, External factors and investor behavior, Behavioral Corporate Finance.
13 Dividend policy: Observed dividend policy pattern, Dividend policy in frictionless capital market,
. Effect of market imperfections on dividend policy, The agency cost/Contracting model, The
signaling model.

Basic Text Books:

i. Copeland, Weston and Shastri, Financial Theory and Corporate Policy, 4 th Edition, Pearson
Addison- Wesley, Latest Edition.
Reference Books:
i. Bodie, Kane and Marcus, Investment (5th edition), McGraw Hill
ii. Hull, Options, Futures and Other Derivative Securities, 7th edition, Prentice Hall, 2008

FIN 5204 Bank Fund Management

1. Introduction to Bank Management: Meaning Evolution and importance of Bank
management, Role of Commercial Banking in the Economy-Direct Flow and Between
 Surplus and Deficit units in economy, Current Banking Structure and Regulation,
Organization set-up of Bank, Packing-order theory of Funds Management.
2. Asset Management: Sources and uses of Bank Funds, Definition of Asset Management,
Approaches to allocating funds to Assets- The Pool of funds approach and the Asset
Allocation approach.
3. Measuring Returns and Risks in Banking: Key Return and Risk Measures for a simple
Bank, Return Risk Payoffs.
4. Measuring and Management of Liquidity: Measuring Needs, Matching Liquidity
needs, Measuring Liquidity sources to Liquidity needs Trade off between Liquidity land
profitability, Theories of Liquidity Management The Commercial load theory, the
Anticipated Income theory, the Shift ability theory and the Liquidity Management
Theory, Determining Banks Reserve Needs, Primary & secondary reserve: Meaning,
Functions, Purpose, Factors influencing the reserve.
5. Management of Deposits: sources of Bank Fund, Kinds, of Deposit, Factors Influencing
the level of Banks deposits.
6. Measuring and Using the Cost of Funds: Factors behind the determination of optimum
size of fund, objectives of measuring cost of Fund; Methods of Measuring cost of fund;
Historical Average cost method, Marginal cost of fund method, Weighted average
projected cost methods, calculation of cost of fund based on the bank’s current data.
7. Management of Capital Fund: Definition of Bank Capital; Components of bank capital;
Classification of Bank Capital; purposes of Bank Capital; Functions of Bank Capital-
Traditional and Modern Functions; Adequacy of Bank Capita;-Definition, Reasons to
maintain adequacy of Bank capital standards to Measure Capital Adequacy; Summary of
Risk weights and major Risk categories for proposed Risk; classification of Bank
ascending to capital Ration.
8. Management of Loans and Advances: Cardinal Principles of sound bank lending;
major classification of Loans and advices; credit investigation- Borrower’s status and
credit Report; Loan Pricing. Supervision and Follow up of Loan and Advances-Meaning
of Supervision and Follow up. Effectiveness of supervision and Follow-up. Supervision
at branch level; Security, stock statements, operation of customer’s account, financial
position, purpose Confirmation letters, control at Regional/central office: Return and
statements, Review of advances, periodical inspections, control by central bank;
Recovery of Loans & Advances-Recalling of Advances, ways involved in reeling of
Advances.
9. Management of Default Loans: Meaning Reasons of load Default; international and
unintentional load default; classification of load default; Frauds mull-practices.
10. Contemporary Issues in Banking.
Texts:
i. George H. Hempel, Alam B. Coleman and Donald G. Simonson, Bank Management-Text
and Cases, 3rd Editions.
ii. R. M. Srivastava, Management of Banks.
iii. H. L. BEDI and V. K. Practical Banking Advances, Tenth Edition.
Reference Books
i. Johan A. Haslem, Bank Fund Management
ii. Bangladesh Bank Circular

FIN 5205 Financial Modeling

1. Overview of Financial Calculations: Present Value and Net Present Value, Internal
Rate of Return and Loan Tables, Multiple Internal Rates of Return, Flat Payment
Schedules, Future Values and Applications, A Pension Problem Complicating the Future-
Value, Continuous Compounding, Discounting Using Dated Cash Flows

2. Advanced Excel functions and procedures: Accessing functions in Excel,

Mathematical functions, Statistical functions Using the frequency function, Using the
quartile function, Using Excel’s normal functions, Lookup functions, Other functions,
Auditing tools, Date Tables- Setting up Date Tables with one input, Setting up Date
Tables with two inputs, XY charts, Access to Date Analysis and Solver, Using range
names, Regression, Matrix algebra and related functions-Introduction to matrices,
Transposing a matrix, Adding matrices, Multiplying matrices, matrix inversion, Solving
systems of simultaneous linear equations, Summary of Excel’s matrix functions.

3. Calculating the Cost of Capital: The Gordon Dividend Model, Adjusting the Gordon
Model to Account for All Cash, Using the Capital Asset Pricing Model to Determine the
Cost of Equity rE, Three Approaches to Computing the Expected Return on the Market
E(rM), Calculating the Cost of Debt, When the Models Don’t Work? Cases.

4. Financial Statement Modeling: How Financial Models Work? Free Cash Flow:
Measuring the Cash Produced by the Business, Using the Free Cash Flow to Value the
Firm and Its Equity, Some Notes on the Valuation Procedure, Debt as a Plug,
Incorporating a Target Debt/Equity Ration into a Pro Forma, Calculating the Return on
Equity. Building a Financial Model: The Case of PPG Corporation [Case for students]

5. Portfolio Models: Calculating Portfolio Means and Variances, [Combining risk-free and
risky asserts, Problem One-combining a risk-free asset with a risky asset, Problem Two-
combining two risky assets, Problem Three-combining a risk-free asset with a risky
portfolio, User-de.ned functions in Module.

6. Calculating Efficient Portfolios When There Are No Short-Sale Restrictions:

Preliminary Definitions and Notation, Theorems on Efficient Portfolios and CAPM,
Optimization Procedure Finding Efficient Portfolios in One Step, Finding the Market
Portfolio: The Capital Market Line, Testing the SML: Implementing Propositions.

7. Calculating the Variance-Covariance Matrix: Computing the Sample Variance-

Covariance Matrix, Alternate Methods for Computing the Sample Variance-Covariance
Matrix, Computing the Global Minimum Variance Portfolio, Computing an Efficient
Portfolio, Alternatives to the Sample Variance-Covariance: The Single-Index Model,
Alternatives to the Sample Variance-Covariance: Constant Correlation, Shrinkage
Methods, Alternatives to the Variance-Covariance Matrix: Impact on the Minimum-
Variance Portfolio and the Optimal Portfolio.

8. Estimating Betas and the Security Market Line: Testing the Security Market Line,
The Inefficiency of the –Market Portfolio, How Can We Test the CAPM? Using Excess
Returns Dose the CAPM Have Any Uses?

9. Event Studies: Outline of an Event Study, A Fuller Event Study: Impact of Earnings,
Announcements on Stock Prices, Using a Two-Factor Model of Returns for an Event
Study, Using Excel’s Offset Function to Locate a Regression in a Date Set, Cases
 10. Value at Risk: Defining Quintiles in Excel, A Three-Asset Problem: The Importance of
the Variance-Covariance Matrix, Simulating Date-Bootstrapping, Making a Bingo Card
in Excel.
Text:
i. Financial Modeling by Simon Banning, MIT Press, 3rd edition, 2018

Reference Books:
i. Advanced Modeling in using Excel and VBA Mary Jackson and Mike Staunton
ii. Chandra Sengupta ``Financial Modeling using Excel and VB’’ (For Excel 2007) Wiley
Finance 2009
iii. Handbook of Modeling High-Frequency Date in Finance-Freder G. Viens, Maria C.
Mariani, Ionut Florescu, Wiley Publications