Finance brochure 2012

Undergraduate information

Finance Capital markets and financial institutions Investments and financial planning

Corporate finance

FInance

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Contents What is finance?

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Majoring in finance Double majors Sample course plan

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Focus on first year finance

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Bachelor of Commerce graduate pathways Honours Careers Professional accreditation Graduate study in finance

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Breadth in finance

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“I chose to study a Bachelor of Commerce at the University of Melbourne due to its reputation as a renowned business school. As a degree from Melbourne is highly regarded by employers I thought it would provide me with the opportunities to succeed in my career.

Business Consulting has been a great subject and I’ll highly recommend it to any student who is interested. Being a practical consulting subject, it provides an insight into the problems and issues that you may come across while working with a real client. It also provides the opportunity to work within a multi-disciplinary team, where you can learn about how to deal with different styles of leadership and how to best delegate tasks according to your team member’s strengths.

What I loved best about Business Consulting was the chance to add value to an organization and develop skills that were unique to this subject.”

Connie Lui Connie Lui is a current Bachelor of Commerce student who is majoring in Accounting and Finance. She is the recipient of an Access Melbourne Scholarship and recently completed a summer internship in the Assurance Division at Ernst & Young.

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Bachelor of Commerce

What is finance?

Finance is a discipline involving the study of how individuals, businesses and institutions raise funds to implement investment strategies, and how they allocate these funds to a variety of investment opportunities, allowing for the time between investment and future payoff and the risks attached to these future payoffs.

The discipline of finance covers three key areas: > Capital markets and financial institutions > Investments and financial planning > Corporate finance You will have study options in each of these areas, as well as personal finance and real estate finance streams.

Five reasons to choose finance at Melbourne 1. Quality staff

You will be taught by a team of excellent teachers with both academic and finance industry credentials who provide a variety of learning experiences through engaging lectures and tutorials.

4. Access to industry professionals

The curriculum in the finance major is closely tied to professional practice and is well suited to preparing graduates to enter the finance profession either in Australia or overseas.

Through the Corporate Finance in Action program, students enrolled in this third year subject experience real life industry cases presented by investment bankers. Several other subjects feature industry guest lecturers, including Personal Finance and Entrepreneurial Finance. These guest lecturers are all practitioners working in the finance industry, from organizations such as Booz Allen Hamilton, Deutsche Bank, Goldman Sachs JBWere and UBS.

3. Outstanding honours program in finance

5. Interactive and collaborative learning opportunities

The honours program in finance at the University of Melbourne has a fine reputation. The degree is well regarded by private and public sector firms including major corporations, investment banks and management consulting firms. Graduates have also gone on to pursue further academic studies including MBA and PhD degrees at top Australian and international universities.

Several subjects in the finance major are part of the internationally recognised Peer Assisted Study Scheme (PASS). You will have the opportunity to learn in small groups with a trained peer leader – a senior student who has done well in the subject. These study groups are run in addition to the regular tutorial program and feature collaborative learning in a unique environment.

2. Internationally recognised curriculum

Finance

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Majoring in finance Investments and Financial Planning

Finance 1

Business Finance

Investments1

Corporate Finance

Derivative Securities1 Students not wishing to pursue a major in finance can nevertheless study electives in the following sub-disciplines as part of their BCom degree: Capital Markets and Financial Institutions

Capital markets include the stock market, the debt markets and other asset markets, while financial institutions include retail, commercial and investment banking firms, brokers and financiers. In this area of finance the main focus is on the institutions that dominate the finance industry and the financial instruments, including foreign exchange, bonds and shares, in which they trade. Successful practitioners specialising in this area normally require a network of contacts, knowledge of legal and tax issues, and an understanding of finance theory and clients’ needs in order to structure and implement a transaction.

Finance 1

Business Finance

The focus of this area is the pricing of securities and the process of combining securities into portfolios. There is an increasing demand for professionals who can give sound investment advice to both institutional investors, such as trustees of superannuation funds, as well as to individual investors (personal finance). These professionals work for a wide range of employers including stockbrokers, banks, consultants, accounting firms and financial planners.

Their role may include alerting clients to, and advising them about, particular securities which they may want to buy or sell. Others will concentrate on examining the performance and prospects of particular companies and assessing the attractiveness of the securities they have issued. Derivative securities such as options, futures and swaps, may be used for both hedging and speculative purposes. At the retail level, financial planners advise individuals on retirement planning and superannuation.

Investments Finance 1

Business Finance

Derivative Securities1

Investments1

Financial Planning

Corporate Finance

This area is primarily concerned with the acquisition of funds and the efficient management of a company’s financial resources. Achievement in this area has increasingly become the hallmark of successful and profitable businesses.

One aspect of corporate finance involves capital raising: should the company borrow or raise money from its shareholders? How much? When?

Another aspect of corporate finance is the best use of the company’s money: does it need more equipment? More inventory? Less cash on hand? Perhaps a merger or takeover?

Finance 1

Business Finance

Corporate Finance1

Real Estate Finance

Real estate is the largest asset class in the world. It consists of everything from the single-family home to real estate-backed derivative products. This subject combination will teach you how to analyse investments in residential and commercial real estate. The stream will examine the operation of the markets for owner-occupied and rental housing, the operation of markets for commercial space for retail, office and industrial uses and the mortgage market. This stream introduces the specialised economic and financial principles needed for portfolio and investment decision-making for this diverse asset class.

Finance 1 Finance 1 Management of Financial Institutions Business Finance

Introductory Personal Finance

Business Finance

Introduction to Real Estate Analysis

Intermediate Personal Finance

1 These subjects have a prerequisite other than Business Finance. Please check the course and subject handbook for a comprehensive list of prerequisites.

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Bachelor of Commerce

Double majors Students majoring in finance can complete a double major with one of: > Accounting (with accreditation) > Economics > Management > Marketing

Students are advised to obtain course advice and plan their subjects carefully in order to maximise their options, such as eligibility for entry into the honours year.

The example below shows how you can complete a double major in finance and accounting, and meet the accreditation requirements for the accounting profession.

This sample course plan also meets honours entry for either finance or accounting.

If you are pursuing accounting accreditation, three of your breadth subjects must include Principles of Business Law, Corporate Law and Taxation Law.

Sample course plan Double major in finance and accounting

1st Year

2nd Year

3rd Year

Semester 1

Introductory Microeconomics

Quantitative Methods 1

Accounting Reports and Analysis

Breadth

Semester 2

Introductory Macroeconomics

Accounting Processes and Analysis

Accounting Transactions and Analysis

Principles of Business Law

Semester 1

Organisational Behaviour

Quantitative Methods 2 / Introductory Econometrics

Cost management

Breadth

Semester 2

Business Finance

Intermediate Financial Accounting

Breadth

Corporate Law

Semester 1

Basic Econometrics / Econometrics

Investments

Enterprise Performance Management

Financial Accounting

Semester 2

Corporate Finance

Derivative Securities

Auditing and Assurance Services

Taxation Law

Compulsory subjects

Finance subjects

Accounting subjects

Economics subjects

Breadth

“I really enjoy the breadth of study you can do in the BCom. The course is great because you have a lot of freedom in choosing the direction of your career in business. The University also provides a great environment to learn the personal, professional and social skills required to launch into a successful business career.�

Lindsay Smelt Lindsay is a current Bachelor of Commerce student majoring in finance and economics.

He was a member of the student team at the Copenhagen Business School Case Competition and is heavily involved in Students In Free Enterprise (SIFE). He is also completing a concurrent Diploma of Modern Languages in French and went on exchange for six months to Lyon.

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“Commerce has broad implications in our everyday lives. Everyday you see some form of commerce at work, be it economics, marketing or finance. Studying Commerce at the University of Melbourne has assisted my development of the understanding in this field.”

Alex Lau Alex completed the Bachelor of Commerce, majoring in Finance and Accounting, in 2011. He was on the Dean’s Honours list and was a member of the 2011 Marshall Case Competition student team, and currently works at Accenture as an Analyst.

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Bachelor of Commerce

The Basement Lecture Theatre in the Business and Economics building

Focus on first year finance Subject name: Finance 1 Contact hours

Skills developed

Teaching methods

2 hours of lectures and 1 hour of tutorials per week

On successful completion of this subject you should be able to: > provide an overview of a ‘developed’ financial system > distinguish between the basic types of financial instruments and their main institutional users and issuers > appreciate basic concepts in finance, including risk, return, arbitrage, primary claims and contingent claims > apply financial mathematical techniques to financial instruments > explain the operation of capital and derivatives markets > reflect upon the process of financial innovation

The finance curriculum provides undergraduate students with solid foundational knowledge in the discipline of finance through engaging lectures, tutorials and a variety of student learning experiences unique to the Department of Finance.

Topics covered

This subject introduces students to finance and provides them with fundamental principles and institutional knowledge to progress in the discipline.

Topics include direct financing and security yields, banking and the money market, the bond and equity markets, offshore finance and foreign exchange, the behaviour of financial variables, interest rate risk management and derivative securities. These topics will be used to illustrate fundamental financial concepts such as risk, return, and present value.

Assessment

This subject is assessed via assignments during semester worth 20% of the final grade, and a 2-hour end-of-semester examination worth 80% of the final grade.

Please check the Course and Subject Handbook to confirm subject details.

As a supplement to lectures and tutorials, the internationally recognised Peer Assisted Study Scheme (PASS) is available in several finance subjects in the finance major, including Finance 1. This program provides an opportunity for students to learn in small groups with a trained peer leader. These groups are interactive and use collaborative learning. Research has shown that students who regularly attend PASS sessions improve their marks and enhance their understanding and enjoyment from taking these subjects.

Finance 1 also incorporates an online learning experience called FinanceNow!, which provides real-time, real-world financial news items and podcasts as they relate to the lecture materials provided in class.

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Bachelor of Commerce graduate pathways Upon completing your Bachelor of Commerce with a major in finance, there are a number of graduate pathways to employment, further study and research.

Bachelor of Commerce Duration: 3 years full time Choose from the following major areas of study: Accounting, Actuarial studies, Business, Economics, Finance, Management, Marketing www.bcom.unimelb.edu.au

Honours Duration: 1 year full time Available in: accounting, finance, actuarial studies, economics, management or marketing or a combination of two areas.

An honours year enables you to extend your knowledge of your major or area of specialisation through higher level honours subjects and by undertaking an independent research thesis in a single area of study under the guidance of an academic supervisor.

Graduate research degrees1 Duration: 2-3 years full time The Graduate School of Business and Economics offers a range of Masters by Research and PhD programs. See www. gsbe.unimelb.edu.au for more information.

Graduate professional development degrees1

Graduate professional entry programs1

Duration: Generally 1.5-2 years full time

Duration: Generally 2-3 years full time

The Graduate School of Business and Economics offers a full suite of graduate business and economics programs with an emphasis on career entry programs for recent graduates and specialist education for professionals. Our expertise spans the fields of accounting, actuarial studies, economics, finance, human resource management, international business and marketing. See www.gsbe.unimelb.edu.au for more information.

Title: Master of, unless otherwise specified: Including: Engineering, Forest Ecosystem Science, Information Systems, Juris Doctor (Law), Science (Management Science), Teaching, Urban Horticulture, Urban Planning. See www. futurestudents.unimelb.edu. au for more information.

Employment Melbourne Commerce graduates enjoy careers both locally and abroad in areas such as accounting services, finance, insurance and superannuation services, banks, mining, manufacturing, utilities and transport services, business, management, advertising, market research and statistical services, legal services, retail and wholesale, and computing and telecommunications services.

See www.bcom.unimelb.edu.au/pathways/careers.html for more information.

1 Selection into these programs is based on performance in an undergraduate degree and additional selection criteria may also apply.

Note this information indicates many but not all the possible pathways to graduate study.

Honours On completion of their third year of the Bachelor of Commerce, highachieving students majoring in finance may apply for a place in the honours year in finance. This additional year of study enables students to pursue an area of study of particular interest to them, and to increase their financial knowledge and research skills to an advanced level. Honours graduates are highly sought after by major financial institutions such as investment banks and consulting firms. For further information, please visit www.bcom. unimelb.edu.au/pathways/honours/.

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Bachelor of Commerce

Careers

Professional recognition

Graduate study in finance

Employers are increasingly looking for well-rounded graduates.

Finance students can enhance their attractiveness to employers by undertaking complementary studies in other commerce disciplines including accounting, economics, management and marketing. Breadth subjects will also help to develop a well-rounded graduate. For example, depending on the skills and interests of the individual student, subjects in languages, politics, law, taxation, property or psychology may be attractive options. A careful selection of breadth subjects will significantly enhance a finance major’s career opportunities.

CFA Institute Program Partnership

Career entry programs

In 2009, the University of Melbourne became a Program Partner of the CFA Institute, the global association for investment professionals that awards the prestigious Chartered Financial Analyst® (CFA®) designation. The partnership means that the finance major in the Bachelor of Commerce covers 70 per cent of the Level I CBOK topics including the CFA Institute ethical and professional standards.

Master of Management (Finance)

Recognition as a CFA Program Partner signals to potential students, employers, and the marketplace that the university curriculum is closely tied to professional practice and is well suited to preparing students to sit for the CFA exams. As part of the partnership, students in the partnering programs are entitled for scholarships, access to CFA Institute curriculums, journals, webcasts, and other educational resources, and each student will have access to a specially prepared online Level I sample exam.

This one-year program is open to those interested in working in the finance industry and who hold a Bachelor of Commerce degree or equivalent with some studies in finance.

www.cfainstitute.org

Research higher degree programs

Employers of finance graduates:

> financial services firms > retail banks, including Commonwealth Bank, ANZ Bank and HSBC Bank Australia > investment banks, including Deutsche Bank and JP Morgan > stockbrokers, including Goldman Sachs JBWere > accounting and advisory / consulting firms, including Ernst & Young and PricewaterhouseCoopers > industry, including Invensys and Hewlett-Packard > government, including the Reserve Bank of Australia and the Commonwealth Treasury Career paths:

> financial planning and advising for individual investors > funds management > investment banking > financial analysis > commercial banking > financial institutions management

This two-year program is designed for recent graduates from any discipline, and does not require prior business training or preparation. The course provides foundation training in business, management and finance, followed by deeper study into the finance discipline.

Career development programs

Postgraduate Diploma in Finance

Master of Finance This two-year program is a practical and career-oriented program that provides an ideal entry into the finance industry, with broader and more comprehensive training than is feasible in an undergraduate degree.

Master of Commerce (Finance)

Finance and Treasury Association

The Finance and Treasury Association gives recognition to finance subjects in the Bachelor of Commerce as part of their membership and accreditation requirements. www.finance-treasury.com

This one-year program offers high-level academic training in finance. Many of the graduates and currently enrolled part-time students are employed in highly responsible positions in the business and financial community.

PhD with Coursework (Finance) The Department of Finance offers a PhD program with a coursework component.

Students undertake a maximum of one year of full-time coursework study and two years of full-time research, with close supervision. Students in the program benefit from access to Australian, US and global databases and are active participants in the department’s research seminar series.

> corporate finance officer > financial controller > treasury management > trading and dealing > consulting > client services (sales and marketing) > administrative roles

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Breadth in finance One of the cornerstones of Melbourne degrees is the opportunity for all students to take subjects from outside their major area of study. The breadth component enables you to tap into other bodies of knowledge, methods of enquiry and personal and professional skills. Students in the Bachelor of Arts, Biomedicine, Environments, Music or Science may take breadth subjects in finance.

A basic knowledge of finance benefits a wide variety of career choices where careful financial decision making is necessary. For students studying science and engineering, the discipline of finance provides great opportunities to apply those quantitative skills in practice. Financial decisions often involve behavioural elements.

Psychology students may find the discipline of finance a natural experimental laboratory. An understanding of personal financial management will be valuable in managing your personal finances throughout your life.

Note: to enrol in finance subjects, you must have completed VCE Units 3&4 Mathematical Methods (either), with a minimum study score of 25 (or equivalent) or the first year subject Introduction to Mathematics. To enrol in second year finance subjects, you need to have taken an approved quantitative subject at first year level.

To enrol in third year finance subjects, you will need to have taken an approved quantitative subject at second year level.

Depending on the structure of your degree and subject to prerequisites, you can complete one of the following breadth tracks in finance: Economics and Finance

For non-Bachelor of Commerce students seeking an eventual career or graduate work related to consulting and investment banking.

1st year

Finance 1 Quantitative Methods 1 Business Finance and one of

2nd year

Introductory Econometrics or Quantitative Methods 2 Two of: Investments

3rd year

Corporate Finance Derivative Securities

Your Money or Your Life

For those seeking to understand and prepare for the coming crises in the retirement saving of an aging population.

1st year 2nd year

3rd year

Finance 1 Business Finance Introductory Personal Finance Intermediate Personal Finance (Optional)

Real Estate and the Australian Dream

Explores whether demographic changes explain trends in home ownership, and why some retail areas succeed while others fail.

1st year

2nd year

3rd year

Bachelor of Commerce

Business Finance Introduction to Real Estate Analysis Real Estate Finance (Optional)

Ethics and Investing

How not to repeat the GFC, and what you as an investor can do to help save the planet.

1st year

Finance 1

2nd year

Business Finance

3rd year

Ethics in Finance

FUNDAMENTALS OF FINANCE AND ACCOUNTING

Offers sufficient accounting and finance to gain a basic level of financial literacy with an emphasis on the operation of financial markets.

1st year

2nd year

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Finance 1

Accounting Reports and Analysis Finance 1 Business Finance

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Need more information?

Commerce Student Centre +61 3 8344 5317 Toll free: 1800 666 300 +61 3 9347 3986 13MELB@unimelb.edu.au www.bcom.unimelb.edu.au

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Finance Undergraduate Information brochure Authorised by: Provost Published by: The Faculty of Business and Economics Copyright: The University of Melbourne, July 2012 CRICOS Provider code: 00116K Intellectual Property: For further information refer to www.unimelb.edu.au/Statutes Copyright: Copyright University of Melbourne 2012. Copyright in this publication is owned by the University and no part of it may be reproduced without the permission of the University.

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Bachelor of Commerce

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