1




UNIVERSITY COLLEGE DUBLIN


Bachelor of Business Studies (Singapore)

BBS35 FT Singapore
FIN2002S
Principles of Finance



STUDY GUIDE
Remote Delivery using Brightspace Collaborate



Copyright September 2021



2

Author: Dr. June Neo (September 2021)




This manual was prepared for University College Dublin as a comprehensive support for
students completing the above-mentioned Degree programme.




© This publication may not be reproduced, in whole or in part without permission in from
University College Dublin.







Module Coordinator: Dr. June Neo (local lecturer)
Email: [email protected]
Email subject:
Please state: BBS35 PoF – Topic of enquiry – Student’s Name / Number
Note:
There will be no response if the students failed to state the email subject as
indicated above.

3
TABLE OF CONTENTS
PAGE
WELCOME MESSAGE
1. INTRODUCTION 5
Accessing Brightspace Collaborate
a. Background details
b. Module aims
c. Programme goals

2. MODULE OUTLINE 9
a. Module learning outcomes
b. Themes and topics
c. Learning materials

3. MODULE DELIVERY SCHEDULE 12
a. Session arrangements
b. Student engagement
c. Office hours arrangements

4. ASSESSMENT DETAILS 22
a. Continuous assignments
b. Module assessment components
i. Assignment (Individual)
ii. Assignment (Group)
iii. Examination

5. GRADING 28
a. University grading policy
b. Grade descriptors for assessment components

6. CONCLUDING COMMENTS 30

APPENDICES 31





4
WELCOME MESSAGE
As module coordinator of the Principles of Finance module, I welcome you to the module.

The finance sector is a major driving force of a country’s economy. It encompasses the
creating and maintaining of wealth, and overall managing of money that is crucial to the
success of every business. Very broad areas, finance professionals can be found in every
industry helping businesses as well as individuals.

The subject of Principles of Finance provides a mixture of both theory and practise. It
aims to provide the students with an introduction to the role of Finance, financial markets,
financial institutions as well as analysis of financial securities, thus providing a solid
foundation for further study or employment in the financial services industry.

To successfully complete this module, it is strongly recommended that a consistent
routine of studies is maintained, and several learning activities such as course
assignments are to be completed at the stated submission date(s).

The graduates will have a wealth of career choices within and beyond the finance sector.
You will be equipped for success in fields such as credit, corporate finance, financial
planning and services, investment and wealth management.

This study guide outlines the discussion areas for each session. It is essential for these
to be read prior to the sessions to have a better understanding in the subject topics.

Should you require clarification on any matter pertaining to the module, please do not
hesitate to contact me.

I am looking forward to meeting you soon.

Dr. June Neo
Module Lecturer



5
PART 1: INTRODUCTION
This Study Guide is designed to provide you with details of the module FIN2002S –
Principles of Finance, the learning outcomes, delivery and assessment arrangements.
The Study Guide consists of 6 parts.
Part 1 gives background details to the subject area are provided and the broad aims of
the module are set out.
Part 2 consists of the module outline. In this part the (a) module learning outcomes, (b)
the themes and topics to be explored are explained along with the (c) learning supports
to be used.
Part 3 gives details of the module delivery arrangements. It sets out the session
arrangements and the expectations in relation to your prior preparation and student
engagement.
Part 4 provides details of the assessment techniques used in this module explaining the
assessment components, their rationale.
Part 5 explains the UCD grading policy and grade descriptors drawing on the university
document are given for each assessment component (i) Assignment and (ii) Examination.
Part 6 presents the concluding comments.


Accessing Zoom via Brightspace Collaborate

This module will be wholly delivered via UCD’s Collaborate platform.
This is accessible via brightspace.ucd.ie
The students are informed to access the class by logging into Brightspace, then click on
“My Class” -> “Zoom”

Topic: FT BBS35 FIN2002S POF


6
Background Details
a. Background to the Topic
This course provides an introduction to the principles of banking and finance. It
module covers the fundamental basics of finance. The module will address issues
such as why corporate finance is important and will introduce the theoretical
underpinnings of financial concepts. A comprehensive range of issues including the
role of corporate governance and agency theory in finance, how the stock and bond
markets function, pricing stocks and bonds, and capital budgeting techniques will be
introduced.
The topics covered in this module will allow students to learn about the concepts and
theories in finance that would help investors and business decision-makers in making
investment and financing investments as well as knowing how risk can be managed.
The knowledge obtained from this course would be very valuable for one’s to embark
on a professional or business career in either the Financial Markets or the different
Financial Institutions.
b. Module Aims
The aims of this module are to
- enable students to understand the importance of corporate finance and the
theoretical underpinnings of financial concepts.
- enable students to understand the valuation of stocks and bonds.
- enable students to understand the role of corporate governance and agency
theory in finance.
- allow students to apply capital budgeting techniques in the project evaluation
process

Module philosophy
The module draws on student prior learning and work experience and combines insights
from strategy, international trade and investment theory, human resource management
and other areas.

7
The assessment tasks for this module have been designed with this in mind as detailed
later in the study guide.

Programme Goals
Programme Goals
Specify the overall
programme goal and
insert a one-line
description of each
goal.
Programme Learning
Outcomes
Specify the learning
outcomes associated with
each programme goal.

On successful completion of
the programme students
should be able to:
FIN2002S (Sg)
Principles of FInance

Module Components

1)



Programme Goal 1:
Informed Thinkers:
Our graduates will be
knowledgeable on
management theory
and will be able to
apply this theory to
business problems
(Knowledge).

Programme Learning Outcome
1a:
Explain current theoretical
underpinnings of business and
the management of
organisations.
X
(Exam question,
Individual
Assessment)
Programme Learning Outcome
1b:
Apply appropriate methods,
tools and techniques for
identifying, analysing and
resolving business problems
within functional and across
functional business areas.
X
(Exam question,
Individual
Assessment,
Group Assessment)
2)



Programme Goal 2:
Communication,
Analytical and Critical
Thinking Skills: Our
graduates will have
well developed skills
of communication,
analysis and critical
Programme Learning Outcome
2a
Prepare a short business
presentation (written and/or oral)
on a current business issue.

Programme Learning Outcome
2b:
X
(Individual
Assessment)

8
thinking (Skills and
Competencies).

Analyse specific business case
studies or problems and
formulate a report detailing the
issues and recommended
actions.
Programme Learning Outcome
2c:
Conduct secondary research on
management-related issues and
report on the findings and draw
appropriate conclusions.

3) Programme Goal 3:
Personal and
Professional
Development: Our
graduates will
demonstrate a
commitment to
personal and
professional
excellence and
development (Skills,
Competencies and
Attitudes).
Programme Learning Outcome
3a:
Develop collaborative learning
and team-work skills by
engaging in module-related
team activities.
X
(Group Assessment)
Programme Learning Outcome
3b:
Demonstrate capacity for
problem solving collaboratively
and individually.
X
(Individual
Assessment,
Group Assessment)
4)



Programme Goal 4:
Ethical
Awareness: Our
graduates will
demonstrate an
awareness of ethical
issues in business
and their impact on
society (Attitudes).
Programme Learning Outcome
4a:
Demonstrate an awareness of
ethical values and business
issues concerning the
advancement of the broader
societal ‘good’.
X
(Individual
Assessment)
Programme Learning Outcome
4b:
Illustrate an understanding of
how business decisions might
influence society and the wider
community at large.
X
(Individual
Assessment)



9
PART 2: MODULE OUTLINE
Module Title: Principles of Finance
Module Code: FIN2002S
No. of ECTS: 10

Module Learning Outcomes
On completing this module, students will be expected be able to:
• Understand the importance and the role of Finance
• Apply valuation methods to both stocks and bonds
• Apply the techniques of capital budgeting and identify capital investment projects
that maximize shareholder wealth
• Understand the concepts of risk and return and the basic principles of portfolio
theory.

Module Text: Basic Finance: An Introduction to Financial Institutions,
Investments, and Management (12th Edition)
Cengage by Herbert B. Mayo
ISBN: 9781337691017



Supplementary text 1: Principles of Finance (6th Edition),
Cengage by Besley, S and Brigham, E. F.
ISBN: 9781285429649



Supplementary text 2: Corporate Financial Management. (6th Edition).
Pearson Education Limited by Arnold, G. and Lewis, D.
ISBN: 9781292140445



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Themes and Topics
Part 1 Introduction to Finance:
• The finance world
• The objective of the firm.
• Corporate governance and agency theory.

Part 2: Valuation of Securities:
• Time value of money
• Present value and future value
• Valuation of bonds.
• Valuation of stocks

Part 3: Capital Budgeting decision:
• Net present value NPV),
• Internal rate of return (IRR), and
• payback period methods
• Other project appraisal methods

Part 4: Portfolio Theory:
• Risk and Return.
• Portfolio analysis: mean-variance portfolio theory.
• Efficient portfolios
• Capital Asset Pricing Model (CAPM)
• Efficient Market Hypothesis




11
Learning Materials
For this module, please read the assigned chapters in the prescribed text and attempt the
learning activities in the hand-outs prior to attending the sessions.

Other useful sources
The following textbooks’ companion websites provide a self-quiz and study program that
allows students to evaluate their performance through a practice test and
recommendations:
• https://media.pearsoncmg.com/intl/global/ema_ge_mishkin_econmbfm_11/index
.html
• http://wps.pearsoned.co.uk/ema_ge_mishkin_econmbfm_10/226/58088/148707
66.cw/index.html
• http://wps.aw.com/bp_mishkin_econmbfm_10/215/55045/14091673.cw/index.ht
ml


Students completing this module are expected to participate in session discussions and
learning activities and be familiar with recent developments in the business world. To
facilitate this, the following source material is useful
• The Economist
• The Wall Street Journal
• The Straits Times
• The Financial Times
• Business Week
• Fortune




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PART 3: MODULE DELIVERY SCHEDULE
The module delivery relies on students’ ability to engage in prior preparation, to seek
confirmation and clarification as appropriate and to be actively engaged during the
sessions.
Session Arrangements
Each student is expected to attend and be prepared for all sessions. Table 1 below
outlines the structure for the sessions.
Please see below the schedule and details of our sessions
Session Arrangements
The module delivery relies on students’ ability to engage in prior preparation, to seek
confirmation and clarification as appropriate and to be actively engaged during the
sessions. Each student is expected to attend and be prepared for all sessions. An
essential part of this preparation is to answer of the assigned problems before
coming to class. This will foster discussion and will enhance the learning experience for
the student.


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Table 1 below outlines the structure for the sessions (26th April 2021 – 18th June 2021).
Table 1: Module Delivery Schedule – themes, readings, cases
Dr. June Neo

Date / Time Theme /Topic
title
Text chapters
articles/
Readings*
Part 1: Introduction to Finance
Session 1
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Introduction to Finance
1st half an hour: Module Introduction and
The finance world (Topic 1)
2nd half an hour: Activity
3rd half an hour: The finance world cont’d
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: The objective of the firm
Next half an hour: Activity
Core text:
Chapters 1 to 2

Supplementary
text 1:
Chapters 1 to 4

Supplementary
text 2:
Chapter 1

The activities will
be selected
questions at end
of chapters
Session 2
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings
Introduction to Finance:
1st half an hour: The objective of the firm
2nd half an hour: Activity
3rd half an hour: Corporate Governance
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: Agency theory
Core text:
Chapters 1 to 2

Supplementary
text 1:
Chapter 6


14

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next half an hour: Activity Supplementary
text 2:
Chapter 1

The activities will
be selected
questions at end
of chapters
Part 2: Valuation of Securities
Session 3
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Valuation of Securities:
1st half an hour: Time value of money
2nd half an hour: Activity
3rd half an hour: Time value of money
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: Present value and futures
value – Single cash flows
Next half an hour: Activity
Core text:
Chapters 7, 10 to
14

Supplementary
text 1:
Chapters 9 to 10

The activities will
be selected
questions at end
of chapters
Session 4
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Valuation of Securities:
1st half an hour: Present value and futures
value – Multiple cash flows: Annuity
2nd half an hour: Activity
3rd half an hour: Present value and futures
value – Multiple cash flows: Perpetuity
Short break for 15 minutes
Core text:
Chapters 7, 10 to
14

Supplementary
text 1:
Chapters 9 to 10


15
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next 15 minutes: Activity
Next half an hour: Valuation of Bonds
Next half an hour: Activity
The activities will
be selected
questions at end
of chapters

Session 5
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Valuation of Securities:
1st half an hour: Valuation of Bonds – Cont’d
2nd half an hour: Activity
3rd half an hour: Valuation of Stocks
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: Valuation of Stocks –
Cont’d
Next half an hour: Activity
Core text:
Chapters 7, 10 to
14

Supplementary
text 1:
Chapters 9 to 10

The activities will
be selected
questions at end
of chapters
Part 3: Capital Budgeting decision
Session 6
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Capital Budgeting decision:
1st half an hour: Net Present value (NPV)
Concept
2nd half an hour: Activity
3rd half an hour: NPV calculations
Short break for 15 minutes
Core text:
Chapters 19, 21
to 22

Supplementary
text 1:
Chapters 12 to 13


16
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next 15 minutes: Activity
Next half an hour: issues with NPV
Next half an hour: Activity
Supplementary
text 2:
Chapter 2

The activities will
be selected
questions at end
of chapters

Session 7
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Capital Budgeting decision:
1st half an hour: Internal rate of return (IRR)
Concept
2nd half an hour: Activity
3rd half an hour: IRR calculations
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: issues with IRR
Next half an hour: Activity


Core text:
Chapters 19, 21
to 22

Supplementary
text 1:
Chapters 12 to 13

Supplementary
text 2:
Chapter 2

The activities will
be selected
questions at end
of chapters

Session 8
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Capital Budgeting decision:
1st half an hour: Payback period Concept
2nd half an hour: Activity
3rd half an hour: Payback period calculations
Short break for 15 minutes
Next 15 minutes: Activity
Core text:
Chapters 19, 21
to 22

Supplementary
text 2:
Chapter 4


17
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next half an hour: issues with Payback
period
Next half an hour: Activity

The activities will
be selected
questions at end
of chapters
Session 9
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Capital Budgeting decision:
1st half an hour: Other project appraisal
methods – Profitability Index
2nd half an hour: Activity
3rd half an hour: Profitability Index
calculations
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: issues with Profitability
Index
Next half an hour: Activity


Core text:
Chapters 19, 21
to 22

Supplementary
text 2:
Chapter 4

The activities will
be selected
questions at end
of chapters
Part 4: Portfolio Theory
Session 10
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Portfolio Theory:
1st half an hour: Risk and return concept
2nd half an hour: Activity
3rd half an hour: Risk and return calculations
Short break for 15 minutes
Next 15 minutes: Activity
Core text:
Chapter 8

Supplementary
text 1:
Chapter 11


18
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next half an hour: Portfolio analysis: mean-
variance portfolio theory
Next half an hour: Activity

Supplementary
text 2:
Chapters 6 to 7

The activities will
be selected
questions at end
of chapters

Session 11
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Portfolio Theory:
1st half an hour: Portfolio analysis: mean-
variance portfolio theory – cont’d
2nd half an hour: Activity
3rd half an hour: Efficient portfolios
Short break for 15 minutes
Next 15 minutes: Activity
Next half an hour: Efficient portfolios –
Cont’d
Next half an hour: Activity

Core text:
Chapter 8

Supplementary
text 1:
Chapter 11

Supplementary
text 2:
Chapter 7

The activities will
be selected
questions at end
of chapters

Session 12
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Portfolio Theory:
1st half an hour: Capital Asset Pricing Model
(CAPM)
2nd half an hour: Activity
3rd half an hour: Issues with CAPM
Short break for 15 minutes
Next 15 minutes: Activity
Core text:
Chapter 8

Supplementary
text 1:
Chapter 11


19
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Next half an hour: Efficient Market
Hypothesis
Next half an hour: Activity

Supplementary
text 2:
Chapter 8

The activities will
be selected
questions at end
of chapters

Session 13
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
Revision


Session 14
Groups A to F:
Please check your
session dates

Online session
begins at:
Groups A to F:
Please check your
session timings
Revision
Module Review and Close out Session


20

Please log in using
your Zoom login
link found at page 5
of this study guide
at least 5 minutes in
advance
* Some chapters in the text are assigned for more than one theme.


Preparation Required in Advance of Sessions / Seminars
In addition to the continuous assessment, you are expected to have read the following
topics in advance of meeting the module coordinator / course lecturer at the seminars:
 Basic calculus and mathematics/statistics
 Fundamental finance concepts
 Fundamentals of accounting, especially the structure and elements found in financial
statements
 Fundamentals of corporate finance (e.g. financial management decisions, investment
appraisal techniques such as net present value and internal rate of return)
 Read the relevant chapters of the prescribed text and answer the assigned
questions before coming to class.

BSc modules are 10 ECTS the workload should reflect that fact. It is essential to set out
the schedule to that students can plan their learning activities, especially those who are
aiming to balance study and work demands.
The readings detailed above have been assigned and students are expected to be fully
familiar with them. These readings are an important learning source and supplement the
session and text materials.



21
Student Engagement
During the sessions, students are expected to be able to discuss issues arising from the
assigned chapters and readings for the topics as scheduled above.
Session participation is a vital element in the design of this module. Therefore, all
students are expected to engage in class discussion and debate in order to facilitate the
formation of their critical judgements.
To support your learning, Power-Point slides will be available which (on certain occasions)
may need to be upgraded / modified during or following the sessions depending on the
issues raised.


Office Hours Arrangements
I will be available for upon the date(s)/time(s) below should you wish to meet me
individually to discuss any aspect of this module.
• Up to half an hour before the class starts, prior appointment is strictly required.




22
PART 4: ASSESSMENT DETAILS
This module has three assessment components with specific weightings and marks
awarded totalling 1001. The purpose of each assessment is as follows:
• Individual Assignment aims to focus your learning by ensuring understanding of
business structures and theories. You will be asked to evaluate business entities and
display your ability to apply it to real situations through a variety of assessment
strategies. Continuous Assessment is intended to promote inter-active learning
through group work while assessing your understanding of directors’ duties and its’
academic versus practical applications. Continuous Assessment has been designed
so that you will be assessed through multiple assessment types. These assessments
may come in the form of a report, class participation, group work or any alternative
combination.

• Group Assignment aims to focus your learning by ensuring understanding of what
you have learned during the sessions.

• The Examination is the formal examination which aims to get insights on your
understanding of issues (theory and practice) addressed in the module.

Students are expected to complete all assessments that they are submitted by the
specified date. All submissions must be typed, be well laid out, written in an academic
style with appropriate headings (introduction, main part and concluding comments) and
sections.
Please ensure that all submissions are entirely your own work – for UCD’s policy on
plagiarism click on the link below (please see Appendix 3 for further information on
Plagiarism and the policy on the Late Submission of Coursework):
http://libguides.ucd.ie/academicintegrity
The weighting assigned for each component is shown in Table 2 below.
(* I = Individual; G = Team)

1 As the Overseas Programme modules are worth 10 ECTS they should be graded out of 200
marks.

23

Table 2 – Assessment Components
Assessment components Weighting Individual
1. Individual Assignment 30% I
2. Group Assignment 30% G
3. Examination 40% I
*With regards to Continuous Assessments, students are asked to expect one final grade
for this assessment component. All graded elements will be taken into consideration and
calculated to create one final grade

Module Assessment Components
In the following pages, further details of each assessment component are presented along
with expectations in relation to prior preparation and completion.
1. Individual assignment (30%) (Word limit: 2,000 words ± 10%)

This assessment aims to provide students with an opportunity to develop an
understanding of key concepts in finance, analyse various investment products based on
the respective risk and return. You are expected to read beyond textbooks and able to
apply the knowledge gain from real life examples either from your working environment
or/and case studies read, and are able to demonstrate your competence in the areas
indicated in the questions. You are encouraged to provide specific in-depth comments
instead of general comments.

You will need to write up to 2,000 words (± 10%) to address all the questions.


24
Requirement:
Choose a country and examine the finance sector of that country. You need to show your
understanding in the characteristics and efficiency of the finance sector, as well as
examine the implementation of corporate governance in that country.

Your assignment should include:
 Concept of a financial sector: development into a financial centre
 What are the Financial services available in (Country)?
 The Role of Stock Exchange
 The Role of Central Bank in developing the financial sector
 The Roles and Operations of the various Financial intermediaries/Institutions.
 What is the role of government in corporate governance?
 How businesses implement (effective) corporate governance?
 Recent economic development in (Country).





25
2. Group assignment (30%) (Word limit: 2,500 words ± 10%)

This assessment aims to provide students with an opportunity to analyse various
investment alternatives based on the respective risk and return so as to choose the most
appropriate investment opportunity. You are expected to read beyond textbooks and able
to apply the knowledge gain from real life examples either from your working environment
or/and case studies read, and are able to demonstrate your competence in the areas
indicated in the questions. You are encouraged to provide specific in-depth comments
instead of general comments.
Instructions to students: Form a group of 3 to 4 students,
a. Download stock prices for any two companies from different industries,
(preferably same economy) – 5 years of monthly closing prices for each
company. You can use any database to obtain the prices e.g. datastream,
yahoo finance (click the Investing tab followed by the Historical Prices tab)
etc. Use the 5-year data to generate average monthly returns and standard
deviations. Calculate the annualised mean return, standard deviation and
correlation of the two stocks. Show your working clearly.

b. Use investment proportions for the two stocks ranging from 0% to 100%
(you may need a wider range say 0% to 150%) using intervals of 5%.
Tabulate the investment opportunity set of the two stocks. Plot the
investment opportunity set of the two stocks. Show your working clearly.

c. Calculate the weights on the optimal risky portfolio consisting of the two
stocks, denoted as stock 1 and stock 2, using the following formulae. Show
your working clearly.

.1
,
])()([x])([x])([
x])([x])([
12
211221
2
12
2
21
21122
2
21
1
ww
rrErrErrErrE
rrErrE
w
ffff
ff
−=
−+−−−+−
−−−
=
σσρσσ
σσρσ


Show your working clearly for the calculation of the expected return and
standard deviation of this optimal risky portfolio (ORP). Show and label
clearly the optimal risky portfolio on the graph of the investment opportunity
set of portfolios.





26
d. Calculate the weights on the minimum variance portfolio consisting of the
two stocks, denoted as stock 1 and stock 2, using the following formulae.
Show your working clearly.
.1
,
2
12
2112
2
2
2
1
2112
2
2
1
ww
w
−=
−+
−
=
σσρσσ
σσρσ


e. Calculate the expected return and standard deviation of this minimum
variance portfolio (MVP). Show clearly the minimum variance portfolio on
the same graph with ORP in (c) above. Identify the MVP, ORP and efficient
frontier consisting of the portfolios made up of these two assets. Label
them clearly on the graph.

f. Discuss in details on diversification with reference to the efficient frontier
and comparing the expected return and standard deviation of the optimal
risky portfolio to the minimum-variance portfolio in your answer.



You will need to write up to 2,500 words (± 10%) to address all the questions.



Table 2B – Assignment Deadline Summary
Continuous Assessment
Deadlines
Date Assignment Due
Individual Assignment Tuesday, 28th December 2021
Group Assignment Tuesday, 4th January 2022
Examination Tuesday, 11th January 2022

The Assignments must be submitted in via Brightspace. See Assignment deadline in
table 2B above. It is the student’s responsibility to retain a copy of any submitted
assessment/project work. Please read the Grade Descriptors in the Assignment Grade
Descriptor table.



27
3. Examination:

The examination will focus on module themes and the material covered in the text, cases,
assigned readings, videos and class discussions. For this, students are expected to
demonstrate their understanding of theory and practice addressed throughout the
module. The examination question format will be designed to allow you to show your
understanding of the topics discussed and also reveal your learning (new and prior). More
specific guidelines regarding the examination paper format and questions will be provided
during the final session.
Students will have the opportunity to ask questions about its design and style and be
advised the type of answers expected.
A recent past examination paper is included in Appendix 2 to this Study Guide, please be
prepared for slightly different style of question.



28
PART 5: GRADING
This section of the Study Guide provides students with details of the UCD grading system
and also explains criterion referenced grading (UCD Policy). Under criterion referenced
grading, students are graded on the quality of their work without reference to other
students (norm referenced). For instance, the submission that meets the required
guidelines in terms of writing style, analysis, description and / or summary will be awarded
according to the standards set out. All students’ work is graded to indicate the standard
attained using the criterion referenced approach.

Table 3: UCD Grading System
Module Grades
Module
Grade
Grade
Point Description
A+ 4.2
Excellent A 4.0
A- 3.8
B+ 3.6
Very Good B 3.4
B- 3.2
C+ 3.0
Good C 2.8
C- 2.6
D+ 2.4
Acceptable D 2.2
D- 2.0
E 1.6 Unacceptable
FM+ 0.0
Fail FM 0.0
FM- 0.0
NM 0.0 No grade - work submitted did not merit a grade
ABS 0.0
No work was submitted by
the student or the student
was absent from the
assessment



29
More specific grade descriptors are set out for your assessment components in the
following pages. Table 4 below provides descriptors for Assignment – please read them
prior to submitting your work.

Table 4: Grade Descriptors –Assignment
Grade Additional criteria more relevant to module levels 3 and 4
in the categories of analysis, synthesis and evaluation

A+

An exceptionally deep and systematic engagement with the assessment task,
with consistently impressive demonstration of a comprehensive mastery of the
subject matter and discerning judgement, reflecting
• a deep and broad knowledge and highly-developed critical insight, as well
as effective synthesis of extensive reading
• a critical comprehensive and perceptive appreciation of the relevant
literature or theoretical, technical or professional framework
• an exceptional ability to organise, analyse and succinctly present arguments
fluently and lucidly with a high level of critical analysis, supported by very
convincingly deployed evidence, citation or quotation
• a highly-developed capacity for original, creative and logical thinking

A

A deep and systematic engagement with the assessment task, with
consistently impressive demonstration of a comprehensive mastery of
the subject matter, reflecting
• a deep and broad knowledge and critical insight as well as extensive
reading
• a critical and comprehensive appreciation of the relevant literature or
theoretical, technical or professional framework
• an exceptional ability to organise, analyse and present arguments
fluently and lucidly with a high level of critical analysis, amply supported
by evidence, citation or quotation;
• a substantial capacity for original, creative and logical thinking

B

A substantial engagement with the assessment task, demonstrating
• a thorough familiarity with the relevant literature or theoretical, technical
or professional framework
• well-developed capacity to analyse issues, organise material, present
arguments clearly and cogently well supported by evidence, citation or
quotation
• some original insights and capacity for creative and logical thinking

C

An intellectually competent and factually sound answer with, marked by
• evidence of a reasonable familiarity with the relevant literature or
theoretical, technical or professional framework
• good developed arguments, but more statements of ideas
• arguments or statements adequately but not well supported by
evidence, citation or quotation
• some critical awareness and analytical qualities
• some evidence of capacity for original and logical thinking

30

D

An acceptable level of intellectual engagement with the as task showing
• some familiarity with the relevant literature or theoretical, technical or
professional framework
• mostly statements of ideas, with limited development of argument
• limited use of evidence, citation or quotation
• limited critical awareness displayed
• limited evidence of capacity for original and logical thinking

D-

The minimum acceptable level of intellectual engagement the
assessment task with
• the minimum acceptable appreciation of the relevant literature or
theoretical, technical or professional framework
• ideas largely expressed as statements, with little or no developed or
structured argument
• minimum acceptable use of evidence, citation or quotation
• little or no analysis or critical awareness displayed or is only partially
successful
• little or no demonstrated capacity for original and logical thinking


FM

An unacceptable level of intellectual engagement with the assessment task, with
• no appreciation of the relevant literature or theoretical, technical or
professional framework
• no developed or structured argument
• no use of evidence, citation or quotation
• no analysis or critical awareness displayed or is only partially successful
no demonstrated capacity for original and logical thinking


PART 6: CONCLUDING COMMENTS
This Study Guide is designed to assist and guide your learning for this module. It is
important that you read it regularly and do so in conjunction with the core text, the
assigned readings and session materials. Should you need clarification on issues
covered, please let me know during the seminar sessions.
I hope you enjoy the module and wish you good luck with the rest of your study and for
the future.

Dr. June Neo
September 2021


31

APPENDIX 1: GROUP WORK – BEST PRACTICE GUIDELINES
FOR STUDENTS


1. Rationale for group work:
There are many reasons for using group work as part of a learning or assessment strategy
– e.g. enhancing peer learning, creating a participative learning environment, encouraging
debate and discussion, promoting social interaction, and developing students’ teamwork
skills (e.g. negotiation, delegation and leadership).

2. Group formation:
Groups may be allowed to self-form or they may be constituted through some form of
random assignment. In the latter case, the assignment process may be structured to
achieve some diversity within groups – for instance across areas such as ability, cultural
background and gender – or on the basis of class attendance.

3. Managing the group:
a) The onus is on the group to ensure that individual members fully contribute to the
completion of the assigned task.
b) Students must familiarise themselves with the College of Business teamwork model
– https://qsblc.ucd.ie/videos/the-college-of-business-teamwork-model/
c) Effectively managing the group process and addressing challenges encountered
throughout the process is part of developing collaborative skills.
d) Groups must agree basic ground rules around communication procedures,
performance targets, arranging and organising meetings, maintaining records of
group activity, progress reports, solving problems, finalising the project and signing
off on the final product. The group should also, at an early stage in the process,
discuss issues around equity and fairness.
e) Groups should draw up a team agreement and set milestones to use as moments for
the group to review and identify emerging issues and assess progress.

32
f) Groups should assign roles to each member (such as leader, convener, facilitator,
editor).
g) Groups should maintain minutes of meetings, work plans etc.
h) Individual members should maintain a journal of their own contribution.

4. Assessment of group work:
a) The assessment of group work may involve the assessment of the ‘product’ of group
work (i.e. the content covered by the group work activity and assessed by the module
coordinator) and/or the assessment of the group work ‘process’ (i.e. participation in
the group and assessed by group members).
b) An individual assessment component (e.g. peer evaluation, individual reporting) may
be included.
c) Where group work contributes to a module grade, members will be awarded a grade
that accurately reflects their contribution to the completion of the task. To address the
problem of ‘free-riders’ within a group, differential grading may be applied by the
Module Coordinator.

5. Dealing with problems within groups:
a) Any student who is concerned about a member’s contribution to the group’s work must
firstly communicate this to the group members. It can be helpful for the student to
communicate this concern in writing to the rest of the group. The group must strive to
resolve the problem within the group.
b) The removal of a group member’s name from the cover page of a piece of coursework
can only be done with the advance approval of the Module Coordinator.
c) If a group member believes that his/her concerns have not been satisfactorily
addressed within the group, the matter should be brought to the attention of the
Module Coordinator in a timely manner. The Module Coordinator may request that
this concern be raised with him/her in writing.
d) Group problems cannot be solved retrospectively by the Module Coordinator.

6. Additional Resources:
UCD College of Business #LearningInsights: Collaboration and Group work video
resources: https://qsblc.ucd.ie/channels/#learning-insights




33

APPENDIX 2: TEAM AGREEMENT FOR TEAM X [DATE: ]
TEAM MEMBERS

CONTACT DETAILS
MOBILE EMAIL
1
2
3
4
INFORMAL COMMUNICATION
We have decided
1)
2)
3)
MEETINGS
We have decided
1)
2)
3)
MAKING DECISIONS
We have agreed
1)
2)
3)
4)
5)
SANCTIONS
We hope to work in harmony together. We have different strengths. We accept that
this is a team piece of work and we are all responsible for doing our best. However
we agree now that
• If individuals have difficulties in working with the team or on the task, we will
try to sort them out promptly by talking with each other
• We will seek advice - as soon as is possible - from our tutor for those serious
problems which we cannot resolve ourselves.
SIGNED


34
APPENDIX 3: Two Additional Important Documents
You are advised to read the following important documents before you commence your
studies on this module:

1. Guidelines for the Late Submission of Coursework
This document provides a detailed outline of the rules and regulations surrounding
the presentation, submission and marking of assignments. The guidelines provided
must be adhered at all times to avoid an unnecessary loss of marks. Further details
on
https://www.ucd.ie/t4cms/latesub_po.pdf
2. A Briefing Document for Students on Academic Integrity and Plagiarism.
The University understands plagiarism to be the inclusion of another person’s writings
or ideas or works, in any formally presented work (including essays, theses,
examinations, projects, laboratory reports, oral, poster or slide presentations) which
form part of the assessment requirements for a module or programme of study, without
due acknowledgement either wholly or in part of the original source of the material
through appropriate citation. Further details please go to
http://libguides.ucd.ie/academicintegrity

Plagiarism is a form of academic dishonesty. In any assignment, plagiarism means
that you have presented information or ideas belonging to someone else falsely as
being your own original thoughts on a subject.

All assessments/projects submitted must be the result of your own work.
The following statement must be included on the cover page of all
assignments submitted:
I declare that all materials included in this essay/report/project/dissertation is the
end result of my own work and that due acknowledgement have been given in the
bibliography and references to ALL sources be they printed, electronic or personal.

Signed: Student name/s, student number
Date:


35
APPENDIX 4:
SAMPLE EXAMINATION PAPER

Note to Students:
Providing a copy of this paper does not signify that future papers will follow the
exact same format.











36






SUMMER TRIMESTER EXAMINATION – 2021
Academic Year - 2020/21

BACHELOR OF BUSINESS STUDIES (Singapore) Intake 34 Full-Time
FIN 2002S

PRINCIPLES OF FINANCE

Professor David McMillan
Professor John Cotter
Professor Cal Muckley
Dr. June Neo*

Time Allowed: 2 hours + 15 minutes reading time
Instructions to candidates:
Answer ONE compulsory question in Section A
Answer any TWO (2) question in Section B
Students are allowed to use non-programmable calculators

• You are required to upload your answer file to Brightspace
• You are only allowed to upload ONE file.
• There is only one submission chance. Make sure to upload the correct file.
• The submission folder will close sharp at the stipulated time. No extension will be
given.
• Non-submission will result in an ABS grade for the exam.
• You must include a signed plagiarism statement in your answer file.
• A 4-grade point penalty will be imposed for any late submission

To upload your answer file, go to “Assessment – Assignment” of the respective module and you will
then see an exam submission link. Click into the submission link to upload your file.

37
Section A (Compulsory question). 40 marks

Question 1

You are asked to evaluate two mutually exclusive projects with the following cash
flow streams.

Year Project A ($) Project B ($)
0 20,000 15,000
1 7,000 $7,000
2 8,000 7,000
3 9,000 6,000
4 10,000 4,000

(a) Assume that the required rate of return is 12%. Evaluate the above two
projects using the Payback period method, Net Present Value and Internal
rate of return. Show your working clearly
(14 marks)

(b) Which project(s) should be chosen? Justify your answer.
(8 marks)

(c) Discuss the advantages and disadvantage of Net Present Value, Payback
period and Internal rate of return methods.
(6 marks)

(d) In a survey by John Graham “Using CFO Surveys as a Motivational Tool to
Teach Corporate Finance”, the author has discussed how to engage and
motivate students with the results from corporate finance professionals.
Provide your views on the practical relevance of discounted cash flow
techniques (e.g. the Dividend discount model) and cost of equity models (e.g.
Capital Asset Pricing Model, CAPM).
(Hint: You may include the limitations on the empirical testing of CAPM)
(12 marks)

[Total 40 marks]



38
Section B (Answer any two questions) 30 marks each.

Question 2

(a) Define corporate governance.
(5 marks)

(b) Discuss the role of board of directors in corporate governance.
(25 marks)

[Total 30 marks]



Question 3

Assume an interest rate of 5 per cent annually, calculate the Present Value of the
following cash flows:

(a) $2,800 to be received at the end of each of the first 3 years, and $1,500 at
the end of each of the years 5 to 8. Round your answer to 2 decimal places.
(8 marks)

(b) $3,200 to be received every year starting from year 3 to infinity. Round your
answer to 2 decimal places.
(8 marks)

(c) Compare stocks and bonds as a financing tool for corporate borrowers.
(14 marks)

[Total 30 marks]


39
Question 4

The following information compares Mutual Fund Forever against the market
portfolio using both standard deviation and beta as risk measures.

Forever Market Portfolio
Expected Return 16.8% 24%
Standard Deviation 28.8% 24%
Beta 0.6 1.00

(a) Discuss the risk of Forever Ltd against the market portfolio in terms of the
standard deviation, systematic risk and unsystematic risk.
(6 marks)

(b) Comment on the risk of Forever Ltd against the market portfolio in terms of
the beta.
(8 marks)

(c) Comment on the expected return of Forever Ltd shares against the
expected return on the market portfolio. Is the expected return on Forever
Ltd shares adequate? Justify your answer.
(10 marks)

(d) Based on the expected return of 14% of Forever Ltd and the related
standard deviation and beta, will you invest in Forever Ltd? Provide your
justification(s).
(6 marks)

[Total 30 marks]





End of Paper

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