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High level finance class is a new level of intense

Posted on 11/15/17 at 1:40 am
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 1:40 am
Hardest class in my MBA program by far and the amount and difficulty of material is overwhelming.

Some of the topics:
All aspects of fixed income including duration and convexity
Immunization
Rebalancing
Horizon analysis
Spot, short, and forward rate calculations
APV, FTE, Capital Cash Flow, and WACC Valuation methods
Stockholder-Bondholder conflicts
Options and option strategies
Calculating Black Scholes using the cumulative normal density tables
Binomial Risk Neutral Valuation using Martingale probabilities
Hedging risk using derivatives
Put-Call Parity
Real Options
Bankruptcy process and strategies
Degree of operating, financial leverage

....the list goes on. Studying for this is soul crushing
Posted by Doc Fenton
New York, NY
Member since Feb 2007
52698 posts
Posted on 11/15/17 at 3:33 am to
Suck it up, b-school boy. You will get no sympathy from me!

Okay... maybe a little sympathy...
Posted by Azazello
Member since Sep 2011
3182 posts
Posted on 11/15/17 at 6:36 am to
I have derivatives next quarter and it's going to kick my arse.

quote:

Binomial Risk-Neutral Valuation using Martingale probabilities


This post was edited on 11/15/17 at 6:42 am
Posted by monteandmakers
New Orleans
Member since Dec 2014
180 posts
Posted on 11/15/17 at 6:52 am to
I had a similar class that was way over my head. I think I drained a few of the professors red ink pens over that semester. Thank god for partial credit, somehow ended up with a B.
Posted by arkiebrian
NWA
Member since Nov 2006
4167 posts
Posted on 11/15/17 at 7:38 am to
Good stuff in these classes. The kind of knowledge you can actually make money with. I use what I learned to this day.
Posted by BestBanker
Member since Nov 2011
17477 posts
Posted on 11/15/17 at 7:56 am to
You gotta love the language huh? Every industry has it's own! Could we suggest Roseto Stone?
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 8:19 am to
When I get problems requiring levering and unlevering Beta or equity returns at varying debt levels, it is like a gift.... Because that is now the 'easiest' material we need to know.

It wasn't too long ago that material was foreign concepts in my first Valuation class.

Overall, I know that I will have learned a tremendous amount in this class but I can also say with certainty that I have no interest to work in Treasury or a trading desk.
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 8:22 am to
For reference, how does this compare to the CFA exam? I assume all of these concepts show up on L2 or L3?
Posted by Azazello
Member since Sep 2011
3182 posts
Posted on 11/15/17 at 8:30 am to
quote:

lynxcat


You headed to Corp Fin, IB, other?
Posted by GenesChin
The Promise Land
Member since Feb 2012
37706 posts
Posted on 11/15/17 at 8:33 am to
quote:

Binomial Risk-Neutral Valuation using Martingale probabilities
quote:





Stochastic processes aren't that bad
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 8:50 am to
(no message)
This post was edited on 11/19/17 at 10:50 pm
Posted by Azazello
Member since Sep 2011
3182 posts
Posted on 11/15/17 at 8:56 am to
IB - focused on advisory or MM
Posted by Lazy But Talented
Member since Aug 2011
14445 posts
Posted on 11/15/17 at 8:56 am to
quote:

Bankruptcy process and strategies



For some really weird reason, I would like to learn this.
Posted by AmeriKop45
Coach, Wing Tip Seat
Member since Jan 2016
2102 posts
Posted on 11/15/17 at 9:02 am to
quote:

For some really weird reason, I would like to learn this.


Not so weird! The greatest minds out of top 5 B-schools are recruited by your GS/BCG/McKinsey to work in Bankruptcy Consulting/Structuring/TDRs. You work in this field and you are starting at $300K and up

It is a very interesting field indeed.
This post was edited on 11/15/17 at 9:03 am
Posted by barry
Location, Location, Location
Member since Aug 2006
50342 posts
Posted on 11/15/17 at 9:28 am to
quote:

All aspects of fixed income including duration and convexity
Immunization
Rebalancing
Horizon analysis
Spot, short, and forward rate calculations
APV, FTE, Capital Cash Flow, and WACC Valuation methods
Stockholder-Bondholder conflicts
Options and option strategies
Calculating Black Scholes using the cumulative normal density tables
Binomial Risk Neutral Valuation using Martingale probabilities
Hedging risk using derivatives
Put-Call Parity
Real Options
Bankruptcy process and strategies
Degree of operating, financial leverage


I loved that class. I'm getting excited just thinking about put-call parities and black-scholes.
Posted by GenesChin
The Promise Land
Member since Feb 2012
37706 posts
Posted on 11/15/17 at 10:05 am to
quote:



I loved that class. I'm getting excited just thinking about put-call parities and black-scholes.



I love the idea, but we need to get a replacement for B-S option pricing. Long duration option pricing problems are
Posted by Golfer
Member since Nov 2005
75052 posts
Posted on 11/15/17 at 10:07 am to
I’m in stats right now and feel like a moron
This post was edited on 11/15/17 at 10:23 am
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 10:08 am to
We had guest speakers from distressed / turnaround consulting firms. It was a pretty fascinating discussion and I could see that being an interesting career path.

FWIW, MBB rates are ~$150K base and a ~$45K signing bonus post-MBA now at the Consultant level. You don’t hit the ~300 range until you get closer to Principal or at least later stage Project Leader / Engagement Manager.
Posted by lynxcat
Member since Jan 2008
24147 posts
Posted on 11/15/17 at 10:13 am to
I’m almost done with my program and there are three areas where my knowledge base has really grown:
1) Valuation techniques and building DCF models
2) Econometrics, especially as it relates to marketing mix modeling (namely using and interpreting multiple regression)
3) Leadership philosophies and frameworks

Everything else has basically been a wash for me that I studied in undergrad. The people with non-business backgrounds get more out of the classroom.

Statistics used to really be a weak point for me and now I would argue it is becoming a strength. It was the single biggest transformation for me academically.
Posted by barry
Location, Location, Location
Member since Aug 2006
50342 posts
Posted on 11/15/17 at 10:13 am to
quote:

We had guest speakers from distressed / turnaround consulting firms. It was a pretty fascinating discussion and I could see that being an interesting career path.


If your program is worth a shite, my firm was probably there.
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