Department of Finance and Business Economics (FBE) USC...

Department of

Finance and Business Economics (FBE)

USC Marshall School of Business

About Finance and Business Economics at Marshall

Faculty and students in the Finance and Business Economic Department examine economic

decision making and the role of markets in the allocation of real and financial resources. Using

perspectives from both finance and economics, our faculty illuminates issues in corporate

finance, investments, speculative and financial markets, real estate, insurance, banking, industrial

organization, taxation, and in the making of related public policies. We place equal emphasis on

primary theory and its application to the real problems that practitioners face when doing

business.

Department Chair: Dr. Kevin Murphy - [email protected]

Department Staff Members: Deborah Jacobs - [email protected]

Terry Lichvar - [email protected]

Elena Martinez - ejcast [email protected]

Helen Pitts - [email protected]

Office Location:

HOH-231

Office Hours:

8:30 to 5:00 pm - Mon - Fri

Telephone:

(213) 740-6515

Email:

[email protected]

mailto:[email protected]


FBE 501: Investment Banking Fundamental

Course Description:

This course provides a unique view into the role of an investment banking Associate, where

students will effectively function as a junior banker through a sell-side M&A process. Students

will gain practical knowledge and insight into the specific duties of a junior banker, as well as

the actual steps and deliverables required in the course of a transaction. This eight- week

intensive course will integrate skills taught in current Valuation, M&A, Corporate Finance and

Business Law courses. The curriculum will leverage traditional M&A text, case studies, and

instruction from a variety of M&A practitioners (i.e. banking, legal, accounting), with all

assignments designed to replicate real-world deliverables. As a result of this class, students will

have a better grasp of the role of a sell-side investment banker and skillset required to be an

exceptional Associate, ultimately making them better prepared for interviews and a career in the

investment banking industry.

The course will follow a logical progression through the various phases of a sell-side process: i) Evaluation of opportunities and pitching

ii) Preparation of marketing materials

iii) Execution of due diligence, and

iv) Negotiation of definitive documents

Course Objectives: Students will work both individually and in teams to prepare the analysis and materials necessary

for each of the various phases. Key to this process is a review of valuation methodologies and

development of defensible assumptions, with the ultimate objective of valuing a company within

the context of making a strategic alternatives recommendation.

Why FBE501? Taught by current practitioners, students will gain practical knowledge and insight into the

specific duties of a junior banker, as well as the actual steps and deliverables required in the

course of a transaction. As a result students will have a better grasp of the role of a sell-side

investment banker and skillset required to be an exceptional Associate, ultimately making them

better prepared for interviews and a career in investment banking industry. Areas of emphasis for

the class will include:

• Financial analysis and modeling

• Industry and company research

• Preparation of offering materials

• Strategic alternative analysis

• Attention to detail

• Teamwork

Brian Little is a managing director in the Consumer M&A advisory practice for Duff & Phelps

and is based in the Los Angeles office. Brian has over 17 years of experience advising middle-

market clients on mergers and acquisitions and private placements. He has closed numerous

transactions in the Apparel, Sporting Goods, Retail, and Restaurants sectors. Brian earned both

his M.B.A. and B.S. from the University of Southern California's Marshall School of Business.

He is also a Chartered Financial Analyst (CFA) Charter holder as well as a FINRA-registered

General Securities Principal and possesses Series 7, 24, 63 and 79 licenses. Brian Little, CFA is

the Managing Director, Consumer at Duff & Phelps. Professor Little can be reached at

[email protected]

FBE 504 - The FinTech Revolution: Disrupting Traditional Finance

Course Description:

As new models of finance transition to mainstream offerings, consumers, entrepreneurs, CFO’s,

and investors will have more options than ever to finance themselves, their businesses, and

invest. This course will dive into selected emerging models, review underlying financial

principles, and dissect mechanics of execution. The objective is to provide students a functional

understanding of each model from the perspective of various stakeholders and gain the ability to

evaluate financing sources during their professional and personal lives.

Learning Objectives:

After completing this course, the student should be able to:

1. Articulate new business models that are changing the landscape of finance

2. Highlight underlying financial principles related to each model

3. Analyze advantages & disadvantages of emerging models vs. traditional models

4. Expose myths that pervade the corporate world, Wall Street, and Main Street about new

financial businesses

5. Identify strategic and financial determinants of choosing specific financings options

6. Apply emerging financial trends to practical decisions for managers in strategic planning,

performance measurements, capital structure, and risk

About the Instructor:

James Healy is CEO of Digital Disbursements, a digital payments provider, and Founder of JFH

Capital, an investment firm focused on the business services segment. He previously held

various leadership roles at Icahn Automotive Group (IAG), a wholly-owned subsidiary of Icahn

Enterprises (NASDAQ: IEP) including Chief Financial Officer and Senior Vice President of

Corporate Development and Strategy. Before IAG, James was Vice President of Business

Development at FastPay, a lending and payments company serving the digital media sector.

Preceding FastPay, James spent five years with GE Capital in various leadership roles, and he

started his career with Ford Motor Company.

James a member of the Federal Reserve Bank of San Francisco’s Economic Advisory Council, a

board member of Bingeable Network (an entertainment platform utilizing blockchain

technology), and a co-owner of the Phoenix Rising Football Club. He is Chairman of The Healy

Foundation and a member of the Young Presidents Organization (YPO). James earned his MBA

from Georgetown University and his Bachelor's degree from Villanova University. James can be

reached at [email protected]


https://gofastpay.com/

http://www.phxrisingfc.com/


FBE 524 -Money and Capital Markets

Course Description: This course is directed at preparing students dealing with financial markets either as finance

practitioners or in firms sensitive to financial market events. The course develops an

understanding of the forces shaping financial institutions and markets. The vocabulary and

analytical structures learned in this course will be useful in persuasively arguing a position as

part of making business investment or strategic decisions. The course will be extremely useful

for finance students considering careers in commercial or investment banking, real estate,

investment management, or managing small or start-up firms. The course will be very useful for

non-finance students needing general background in the functioning of financial markets because

of their importance to the success of business strategies. The course is also useful for students

pursuing marketing or consulting careers in the financial services industry as well as students

majoring in International Relations and, Political Science. Finally, the course will be helpful in

shaping personal financial plans.

Course Objectives: The objective of this course is to make a wide range of financial market events comprehensible

within an integrated framework. At the conclusion of this course students will have:

An analytical framework and institutional background to understand how financial

institutions interact and affect financial markets and the world economy.

A framework to understand the behavior of central banks (e.g. the Fed and the ECB) and

how these institutions impact financial markets and economic activity.

A framework to argue persuasively a business investment decision or a strategic business

plan. The course will also be helpful in shaping personal financial plans.

A broad understanding of global financial and economic policy.

A good understanding of current financial market developments as well an ability to

place current events into an historical context and to anticipate likely future

developments.

These skills will be especially useful for students considering careers in commercial or

investment banking, real estate, or other financial services. Given the almost universal

importance of these issues, students with a broad spectrum of career interests-including

international relations, consulting, and marketing-will also find the course highly relevant.

About the Instructor: Fatemeh Nazarian is a financial economist who specializes in macroeconomics and corporate

finance. She has conducted research on the effect of fluctuations in exchange rates and

macroeconomic variables and policies on international stock markets. Her research has been

published in Global Portfolio Diversification and International Review of Economics. Winner of

the Golden Apple Teaching Award for Finance and Business Economics. Her current research

involves risk and return to investment, and· exchange rate exposure in emerging nations.

Professor Nazarian can be reached at [email protected]


FBE 526-Macroeconomic Analysis for Business

Course Description:

The course explores the macroeconomic environment in which firms operate. Managers in a

global marketplace care about sales growth, competitiveness of the company, cost of capital,

labor market conditions, and profit. Macroeconomic policies and events directly influence how

these factors are determined. Making sound business decisions requires knowing the economic

and financial environment in which firms operate. It requires an understanding of key economic

indicators, the relationship among economic variables, the mechanics of how the economy works

as a whole, and the role of economic institutions. The topics we cover will help you understand

how economies function, both in the national and international contexts. Economics is one of the

foundations for other functional areas within business, such as Finance and Marketing, strategy,

and understanding economic concepts will help you understand the issues involved in these more

specialized fields.

We will focus on the fundamental issues of macroeconomics and policy issues currently debated

by the media and the public at large. We will cover long run growth, productivity, labor markets,

wages, inequality, unemployment, business cycles, inflation, money, interest rates, asset markets,

monetary and fiscal policy, short run fluctuations of the economy, saving and investment in the

open economy, international trade, exchange rate determination, financial crises, global

imbalances in the allocation of capital, and sovereign debt crises. These are among the set of

factors that influence the risks and rewards from business investments. We will use

macroeconomic tools to analyze how government policy affects the economy, how various

disturbances affect the economy, and how economic news affects interest rates, and asset prices.

This course is a mixture of macroeconomic theory and real world applications.

Who will benefit from this course?

This course is directed at preparing students who will be working as financial and business

economics consultant, dealing with financial markets either as finance practitioners or in firms

sensitive to financial market events. The course develops an understanding of the forces shaping

financial institutions and markets. The vocabulary and analytical structures learned in this course

will be useful in persuasively arguing a position as part of making business investment or

strategic decisions. The course will be extremely useful for finance students considering careers

in commercial or investment banking, real estate, investment management, or managing small or

start-up firms. The course will likewise be very useful for non-finance students needing general

background in the functioning of financial markets because of their importance to the success of

business strategies. The course is also useful for students pursuing marketing or consulting

careers in the financial services industry as well as students majoring in International Relations

and, Political Science. Finally, the course will be helpful in shaping personal financial plans.


Fatemeh Ibrahimi Nazarian is a financial economist who specializes in macroeconomics and

corporate finance. She has conducted research on the effect of fluctuations in exchange rates and

macroeconomic variables and policies on international stock markets. Her research has been

published in Global Portfolio Diversification and International Review of Economics. Winner of

the Golden Apple Teaching Award for Finance and Business Economics. Her current research

involves risk and return to investment, and exchange rate exposure in emerging nations.

[email protected]

FBE 527-Entrepreneur Finance: Financial Management for Developing Firms

Description of the course:

Internal financial management of developing firms. Cash flow analysis; capital budgeting;

sources of financing; risk analysis; measurement of profits; and mergers and acquisitions.

Goal/Desired Learning Outcomes for the course:

This course revolves around the financing of start-up firms, and the tough decisions, pitfalls and

challenges that new enterprises face in raising initial and follow-on financing. The course

develops tools and concepts of corporate finance, in particular valuation, financial modeling,

corporate governance, and investment decisions, within an entrepreneurial context. We use cases

with firms at different stages of their life cycle to tackle the issues that arise when applying these

principles in practice. Some cases take the entrepreneur’s perspective, while others consider

decisions faced by investors.

By the end of the course, students should be able to:

Critically evaluate the potential of a new start-up idea.

Build a spreadsheet financial model for a new venture.

Determine the appropriate source of external capital for an entrepreneurial firm, including

venture capital, angel financing, venture debt, crowdfunding, as well as traditional

funding sources such as bank loans.

Negotiate a term sheet from both an entrepreneur’s and an investor’s perspective.

Understand the role of accelerators and incubators in the start-up financing landscape.

Analyze a firm’s working capital management and explain its relation to growth.

Describe liquidity choices for private firms, and the timing of exit decisions.

Who should take this course:

Students who want to become entrepreneurs or join a small, privately-held firm, and those

interested in pursuing a career in venture capital, angel investing, or private equity.

Major Deliverable:

Group presentation of a new start-up idea, in the style of a venture capital pitch.


Arthur Korteweg is a financial economist whose research interests include corporate finance,

private equity, and alternative assets more generally. His corporate finance work aims to quantify

the costs and benefits of leverage and the determinants of corporate capital structures. In his

private equity research, Arthur focuses on investment decisions in alternative asset classes such

as venture capital, leveraged buyout, real estate, and art. Arthur’s work has been published in

leading journals including the Journal of Finance, the Journal of Financial Economics and the

Review of Financial Studies, and has been cited in the Wall Street Journal, Financial Times, New

York Times, and Forbes, amongst others. Prior to joining Marshall in 2014, Arthur was an


Associate Professor of Finance at Stanford's Graduate School of Business. He can be reached at

[email protected]

FBE 529-Financial Analysis and Valuation

Course Description:

An application-oriented course designed to provide a comprehensive set of tools and a

conceptual framework for tackling the practical challenges of business valuations, financial

planning, and the assessment of financial performance.


The objective of this course is to learn and apply tools of financial analysis to assess the value of

projects and firms from both a conceptual and practical framework. Valuation of projects and

enterprises is of central importance for both companies and investors. When a firm considers an

internally-generated investment project, an external acquisition, an equity issue, or a share

repurchase program, a valuation must be performed. Firms must evaluate if projects or

acquisitions are creating value for shareholders. Investors selling or buying shares need to

evaluate the price of these shares. We will use both financial theory and practical application of

cases and examples to discuss standalone valuation as well as valuation in a transaction setting

such as M&A and LBOs.

By the end of the course, students should be able to:

1. Understand the key aspects of financial analysis for both performance evaluation and

valuation; use and interpret financial data to make decisions about strategic courses of

action for a firm.

2. Perform valuations for public and private firms for purposes of fundamental research,

strategic analysis, transactions such and an IPO or a merger, or a restructuring. Students

will learn the discounted cash flows (DCF) technique, market multiples approach, and

transaction-based approaches such as an LBO model.

3. Assess a firm's business and competitive strategy and whether it is creating value for

shareholders.

4. Effectively communicate a valuation perspective or thesis.

5. Have an understanding of other valuation issues and special situations such as the

challenges of valuing high-growth and private companies, the process of venture capital

and early stage financing, and the approach to valuing highly leveraged companies and

LBO transactions.

Target Audience: Students contemplating careers in investment banking, investment management, security

analysis, consulting, private equity, corporate finance, and corporate strategy. The course will

also help with personal investing.

Major Deliverables: Midterm exam, final exam, group valuation project, group case analyses.


About the Instructor: Scott Abrams specializes in corporate finance, portfolio management, financial analysis and

valuation, and microeconomics .Professor Abrams is the co-instructor for the MBA and

Undergraduate Student Investment Fund classes. He is the 2016Golden Apple Teaching Award

Winner for the Full-Time MBA Core Program. Professor Abrams received his MBA from USC

Marshall and is an alumnus of the Student Investment Fund (SIF) Program. Prior to joining the

faculty at USC Marshall, he worked in corporate finance at Sony Pictures and Warner Bros. In

addition, he is an alumnus of Deloitte and is a licensed CPA. He can be reached at

[email protected]

FBE 535-Applied Finance in Fixed Income Securities

Course Abstract: The global market for fixed income securities and their derivatives continues to grow and evolve

at a rapid pace. This course is designed to develop an understanding of fixed income valuation

and hedging methods and a familiarity with major markets and instruments. Tools for

quantifying, hedging, and speculating on risk are emphasized. The emphasis of the course will

be on conceptual issues as opposed to the institutional aspects (although the basic institutional

aspects will be covered). By all standards this is a quantitative class and a good background in

calculus and statistics is highly desirable, if not necessary. Prior knowledge of Excel will be

useful (though not required) as some analysis will be done in Excel.

Course Requirements: The course will require biweekly in-class and take-home quizzes. All of the quizzes will be open

book and you may collaborate on the take-home quizzes. There will be no exams except the

final.

Course Topics: The following is a list of potential topics, time permitting, that we will cover in the course.

• Introduction to interest rates.

• Interest Rate Risk, Interest Rate Futures and Swaps.

• Repo markets.

• Multi-factor models of interest rate risk.

• Interest rate futures and forward contracts.

• Empirical measures of interest rate risk.

• Introduction to term structure modelling.

• The corporate bond market.

• Mortgages.

About the Instructor: Scott Joslin is an Associate Professor of Finance at the USC Marshall School of Business. His

research focuses on capital markets, in particular, the study of bond and options markets and

their interaction with the macroeconomy. Prior to joining USC, he was on the faculty of MIT's

Sloan School of Management. He received his Ph.D. in Finance from Stanford Graduate School

of Business. Professor Joslin can be reached at [email protected]


FBE 543 - Forecasting and Risk Analysis

Course Objectives:

FBE 543 is an advanced finance elective course that aims to develop the econometric tools used

in many practical problems of modem economics and finance. The quantitative tools developed

in this course will enable practitioners to estimate various asset-pricing models and obtain

estimates of asset return correlations and volatility. The course will require the use of theory and

computer applications, with a bias toward the latter. I will assume that students are familiar with

basic statistics and finance

·concepts. In addition to the tools of trade, the course will also provide an up-to-date evaluation

of the empirical evidence on asset pricing to guide participants' choice of investment strategies.

We will cover two main statistical tools, (i) the Classical Linear Regression Model, (ii) Modem

Time Series Econometrics.

Upon successful completion of the course, students will be able to:

• Estimate various asset-pricing models

• Obtain estimates of asset return correlations and volatility

• Evaluate the empirical evidence on asset pricing to guide their choice of investment strategies

• Describe the classical linear regression model assumptions and perform diagnostic tests

• Describe the value of smoothing techniques and their applications in financial analysis

• Perform univariate time-series modeling for estimation and forecasting of risk and return to

assets

• Perform multi-variable, multi-equation time-series models of estimation and forecasting.

Who should take this Course? Any graduate student (MS Finance, MBA, Financial Engineering, MA Economics, Data

Science) with an interest in finance and application modem time-series techniques to financial

data for estimation and forecasting.

About the Instructor: Professor Safarzadeh earned his PhD. In Economics from Claremont Grade School, majoring in

advanced quantitative methods. in economics and international economics. He joined USC

Marshall School of Business in 2014, teaching quantitative methods in finance and forecasting

and risk analysis in the MS Finance program and international trade and macroeconomics in the

undergraduate program. He has published a number of papers in refereed journals such as

Journal of Applied Economics, Journal of Business and Economics Perspectives, International

Journal of Finance, and International Review of Economics and Business. His areas of research

interest are exchange rate volatility and its effect on international trade and financial market,

technological innovations and economics prosperity, and applied time series analysis. Professor

Safarzadeh can be reached at [email protected]


FBE 545 - Advanced Financial Modeling

Course Objectives:

In this course students will learn how to analyze complicated financial situations and to present

the analysis in a coherent and professional manner. The vehicle used for developing such models

is the familiar spreadsheet Excel. Students will learn how to design specialized Excel tools and

models to evaluate financial problems not covered by built-in Excel functions.

Students will learn modern techniques to perform such tasks as: • Incorporating dynamic changes in growth-related profitability estimates using pro forma cash

flow scenarios. • Forecasting desired/implied levels of debt under changing economic conditions.

• Evaluating the accuracy and sensitivity of common financial tools (such as the weighted

average cost of capital for capital budgeting purposes) and the errors therein.

• Preparing financial forecasts to support various financing alternatives including the valuation of

collateral (e.g., designing a bank's borrowing base for its clients). • Evaluating the return to

stakeholders in the event of insolvency and/or bankruptcy proceedings (e.g., analyzing the

implications of the Absolute Priority Rule).

Upon successful completion of this course, students will be able to:

• Improve their financial decision-making ability in an uncertain business context and reduce the

amount of time needed to apply this knowledge. • Handle financial analysis in a more efficient

and creative way leading to better appreciation by the target audience of what they are trying to

achieve.

• Improve their communication skills through both quantitative and graphical presentations.

• Be able to clearly and concisely convey the impact of change on different aspects of the

financial analysis.

• Appreciate the role of a financial analyst in a complex investment environment.

Course Expectations:

The level of rigor and the amount of coursework required in this class (from both the professor -

d the student) far exceeds most courses. Specifically, financial modeling requires a tremendous

amount-of practice. Without practice, student cannot successfully master the material. Students

will need to meet the following expectations to be successful in this course. First, students should

read all required material before coming to class. Second, students will need to actively

participate in lecture. Third, students will need to spend ample time practicing the skills and

completing homework. Finally, students will need to attend class regularly. Students that cannot

meet these expectations should reconsider not taking this course.

Target Audience: This course is designed for MBA students who are considering careers in Investment or

Corporate Banking, Private Equity and/or Corporate Treasury and Finance. In particular, the

skills taught are both expected and necessary for entry-level Analysts and Associates.

Instructor:

Cosimo Arnesano is a multidisciplinary scientist and scholar with a breadth of knowledge spanning the

fields of biology and biochemistry, physics and optics, statistics and data science, electronics and

biomedical imaging, finance and project management. He holds a PhD in Energy and Environmental

Engineering, a PhD in Biomedical Engineering, and an MBA with concentrations in business analytics

and operations and supply chain management.

Currently, Dr. Arnesano holds the position of Corporate Strategy and Portfolio Manager at Thermo

Fisher Scientific and he holds an appointment at University of Southern California as Adjunct Professor

in the department of Data Sciences and Operations at Marshall School of Business where he teaches

several classes in data mining, project and operations management, and spreadsheet modeling applied to

business fields like finance and marketing. Moreover, he has a joint appointment in the Biological

Sciences department where he teaches Statistics for Biology and Medical students as well as an advanced

medical quantitative imaging class.

FBE - 553 A/B Applied Portfolio Management

Course Description and Objectives: This course offers a year-long seminar in applied portfolio management. It is designed to give

students rigorous exposure to contemporary investment and portfolio theory and practice. It also

allows the students to learn the skills of investment managers. Analytical tools for the valuation

of stocks, bonds, and options will be presented. The course will also cover risk management and

portfolio optimization, behavioral finance, and performance attribution. Students will

demonstrate and refine their ability to apply analytical concepts and techniques through fund

management, sector reports, company research reports, investment research, and security pitches.

The purpose of this seminar is fivefold:

1. To provide a select group of up to 18 MBA students with experience in managing a

portion of the University's equity endowment

2. To provide an academic background for the appreciation of security analysis and

portfolio management through assigned and self-selected readings

3. To enhance the academic experience through interaction with individuals and institutions

engaged in the money management business

4. To produce and present an Annual Report which will provide description of the course

experience and a record of achievement

To award the Guilford C. Babcock Endowed Scholarship, the First Pacific Advisors, Inc./Student

Investment Fund Scholarship, the Provident Investment Counsel Endowed Scholarship and the

Larry and Karen Tashjian Endowed Scholarship to select individuals in the program. The

students are selected based on their genuine interest in pursuing a long-term career in asset

management, investment banking, and/or corporate finance. The number of students allowed to

enroll in this two-semester program is limited to 18 so that (a) each student may have direct,

hands-on experience in managing one of five portfolios and (b) the class, as a group, can visit

with a variety of money managers. The class requires a daytime availability on Mondays and

Fridays so that the student managers can meet with each other and make off-campus visits during

normal business hours. The expected time commitment is 8-10 hours a week. For the 2020 class,

the student managers have assumed fund management responsibilities as of April 1, 2019 and

will relinquish this responsibility as of March 31, 2021. Professor Abrams can be reached at

[email protected]

FBE 554-Trading and Exchanges

Introduction and Course Objectives:

"Trading and Exchanges" will introduce you to the theory and practice of securities and contract

trading at exchanges, in dealer networks, and among brokers. We will examine:

• why and how people trade,

• who profits from investing and speculating, and when,

• the principles or proprietary trading and high-frequency trading,

• why market institutions are organized as they are,

• how markets are changing in response to innovations in information technologies,

• the origin of liquidity, volatility, price efficiency, and trading profits, and

• the role of public policy in the markets.

We will address these issues by studying why and how institutions, dealers, and individuals

trade. Understanding trader behavior and how market structure affects behavior is the primary

course objective.

Target Audience: This course is for anyone who wants to understand how markets work, how people trade, and

when· active investment management works and fails. The reading assignments and the class

lectures are appropriate for students who have no market experience.

Experienced traders also will value this course. The economic perspectives that they learn in this

course can greatly improve their performance. Students with substantial market experience have

little advantage over other studentsotherthaninitialfamiliaritywiththejargonandinstitutions.

This course also will benefit students who want to understand the determinants of investment

performance. We will spend much time discussing why some people make money while others

lose money. These lessons apply to businesses in all competitive industries.

About the Instructor: Larry Harris holds the Fred V. Keenan Chair in Finance at the USC Marshall School of Business.

His research, teaching, and consulting address regulatory and practitioner issues in trading and

investment management. Many practitioners regard his introduction to the economics of trading,

Trading and Exchanges: Market Microstructure for Practitioners, as a "must read" for entrants

into the securities industry. Dr. Harris is lead independent director of Interactive Brokers, Inc.

(ticker: IBKR), director of the Selected Funds, research Coordinator of the Institute for

Quantitative Research in Finance (the Q-Group), and executive director of the Financial

Economists Roundtable. He presently also serves on the SEC Fixed Income Market Structure

Advisory Committee. He has served as Chief Economist of the SEC, associate editor of several

academic journals, and director of CFA Society Los Angeles. He also has worked for an

institutional broker and for a proprietary high frequency trading firm. Professor Harris received

his Ph.D. in Economics from the University of Chicago in 1982, and he is a designated CFA

Charterholder. He can be reached at [email protected]



FBE 555: Investment Analysis and Portfolio Management

Course Objectives: The objective of the course is to study theory and empirical evidence relevant for portfolio

management. This course is intended to provide a genera) overview of capita) markets, financial

instruments, and investment process. Major topics include optimal portfolio selection, trade-off

between risk and return, equilibrium asset pricing models, delegated portfolio management and

fixed income securities. Emphasis will be put on development of techniques that should be part

of the tool kit of those interested in becoming professional investors and/or researchers in

finance. The course material is tilted heavily towards equity markets, since there are separate

courses that cover fixed income markets and derivative securities. This course is designed to

primarily address the needs of advanced students in an MBA program.

Prerequisites I will assume at least a good understanding of basic notions of finance: the time-value of money:

return, risk and portfolio diversification; net present value, etc. These materials are covered in

basic Corporate Finance. I will discuss some of these topics in class, but I expect you to refresh

your memory on them at the very beginning of the semester. Spending time in class to review

topics that are covered by more basic courses would be inefficient and, most important, would

take time away from new and more exciting topics. I assume you are in class to learn new

material and get ready for the job market. I will teach the class accordingly.

Uncertainty is what makes the study of financial markets fascinating. If there were no

uncertainty there would be very few job opportunities on Wall Street! Unfortunately, uncertainty

also makes our task more difficult. The good news is that you will finally understand why you

had to study statistics. No serious study of portfolio and risk management can be undertaken

without a basic knowledge of statistics. You should have covered these materials in core classes.

Any introductory book in statistics should help you get up to speed on descriptive statistics,

inference techniques and regression analysis.

About the Instructor: Tanakorn Makaew is a visiting assistant professor of finance and business economics. His

research interests are in international finance, banking, and computational economics. Prior to

joining USC, he was a financial economist at the U.S. Securities and Exchange Commission and

a part-time faculty at the R.H. Smith School of Business, University of Maryland. From 2010 to

2014, Tanakorn was an assistant professor of finance at the Darla Moore School of Business,

University of South Carolina He was also a visiting scholar at the IMF and a consultant at the

World Bank Group. Tanakorn has published his research.in leading finance journals including

Journal of Financial Economics and Journal of Financial and Quantitative Analysis.' He received

his Ph.D. in Finance from University of Maryland in2010. Professor Makaew can be reached at

[email protected]

FBE 557: Business Law and Ethics

Course Description:


This course examines the following legal aspects of business: the sources for legal and regulatory

controls over domestic businesses, the aspects of constitutional law affecting business

transactions, business ethics, litigation and alternative dispute resolution, business torts, strict

liability and product liability, intellectual property, white collar crimes, contracts, warranties,

Uniform Commercial Code sales and lease contracts, selected aspects of employment law, and,

business successorship issues and estate planning connected therewith.

The course is designed to:

• Identifying legal risks, managing lawyers and the dispute resolution process (civil litigation and

arbitration)

• Business torts (such as trade secrets theft), unfair competition, and related employment law

claims. What recourses are available and at what cost.

• The law of products liability and how to contract away the liability

• Contracts and warranties--one third of the course coverage o contract negotiation sessions, how

to negotiate a contract-the way lawyers do

o contract forms for letters of intent, vendor agreements.

o "gotcha" clauses

• White-collar crimes (How you can be charged as a conspirator or an accessory)

• Foreign Corrupt Practices Act liability- when a "favor'' can land you in jail

• Wage and hour laws and overview of employment law for the manager

• Divorce, wills and trusts as they pertain to the business setting (business succession planning)

You will learn solutions to and not just legal theories for the most common legal issues you will

encounter in your business career. No prerequisites for this course.

Highlights of anticipated class projects: • Developing strategies for use in contract negotiations

• Creating and challenging business contracts

• Strategies to avoid the most common employment law disputes

Target audience: • Students wanting to know the rules of the game, the policies behind business actions

• Those desiring to transfer legal knowledge to solve practical problems

• Students wanting to appreciate the ethical sphere in which business operates-the course is

grounded in business ethics

About the Instructor: Professor Fields has taught this class dozens of times. He is a USC and Santa Clara Law graduate

who has represented private companies from start up through sale on Wall Street. He has been a

practicing lawyer. for many decades and has been on the USC faculty full time for more 17

years. He has received several teaching awards, and been quoted frequently in news publications

and media. He has authored three textbooks in national use. He promises that will be one of your

favorite MBA courses. Your peers agree: "He was very engaging and brought up a lot of real life

examples from his extensive law career. Time flew by in his class and we learned a lot of

valuable information.....l'm surprised it's not actually in the core curriculum. Kerry can be


FBE 558: Law for Structuring, Financing, and Managing Business

During this course you will learn how to: • Recognizetheproblemsagentsandsalesrepresentativescancreateforyourbusmess

• Select the best form for organizing an enterprise o tax considerations

o partnerships and limited liability companies (LLCs)

o franchising, joint ventures, and cooperatives

o corporations and related governance issues

• Understand the legal aspects of financing-debt and equity securities law o credit and secured

transactions

• Apply the most important legal aspects of employment law to the work place • Recognize the

principal elements of intellectual property laws . . .

• Gain a working knowledge of the legal aspects of mergers and acqms1t1ons o buying and

selling businesses-the practical takeaways • NDAs L0Is, purchase and sale agreements

• Buys lls, covenants not to compete and confidentiality agreements

• In class negotiation exercises

• Understand businessreorganizationswithinbankruptcyproceedings-sharksandtargets

o where the M&A deals are

• Understand the basics of securities and finance law--raising equity

0 When "crowd funding" does not work and how to avoid being sued.

• Apply ethics within a compliance environment: employment, competition, and regulatory

matters.

Highlights of anticipated class projects:

• Presentations on special forms of corporate entities

• The function of compliance in the corporate environment

• Negotiating the elements of a purchase and sale transaction-asset, merger, and stock forms.

Target Audience: . . . .

• Those seeking to balance legal expertise with effective management skills

• Students who wish to recognize risk and managing it

• Those who seek to apply legal theory to solve business problems . . .

Youwilllmowtheanswerstothemostcommonbusinessorganizationandtransactionalquestions—not

just legal theories. No prerequisites for this course.

About the Instructor: Kerry Fields has taught this class dozens of times. He is a USC and Santa Clara Law graduate

who has represented private companies from start up through sale on Wall Street. He has been a

practicing lawyer for many decades and has been on the USC faculty fulltime for more 17years.

He has received several hiring awards, and been quoted frequently in news publications and


media. He has authored three textbooks_mnati nal use. He promises that will be one of your

favorite MBA courses. Your peers agree: I think this Business Law course w invaluable and it is

an incredibly important subject matter that should be required coursework for MBA students. He

can be reached at [email protected]

FBE 559 Management of Financial Risk

Course Abstract:

This course intends to be an introduction to financial derivatives, namely options, futures and

swaps. Our main goal will be to focus on the uses of derivatives for hedging and speculation

and to understand risk neutral pricing of derivatives. The emphasis of the course will be on

conceptual issues as opposed to the institutional aspects (although the basic institutional aspects

will be covered). By all standards this is a quantitative class am a good background in calculus

and statistics is highly desirable, if not necessary. Knowledge of Excel will be useful (though

not required) as some analysis will be done in Excel.

Course Requirements:

The course will require regular homework assignments as well as planned and pop quizzes.

There will also be short (group) in-class presentation. There will be no exams except, the

final.

Course Topics:

The following is a list of potential topics, time permitting, that we will cover in the course.

• Introduction to Financial Risk and Derivatives.

• Futures Markets. Institutional aspects of forwards and futures contracts,

absence of arbitrage, determination of forward prices, uses of forwards and

futures for speculation and hedging.

• Options Markets. Institutional aspects of options markets, option payoffs, option

strategies, put-call parity.

• Binomial Pricing Model. Valuation of single and multi-period binomial option using

replication and risk-neutral pricing, using the binomial model to hedge risk.

• Probability and Statistics Review. Review of basic concepts, Brownian motion,

introduction to stochastic calculus.

• Value-at-Risk. Definition and usage of value at risk measure, models and

back testing, using derivatives to reduce value at risk.

• Black Scholes Equation. Geometric Brownian motion, Black Scholes differential

equation, Black Scholes equation, using the Black Scholes model to hedge risk.

• The Greeks. Measurement of risk affecting option positions, how Greeks are used to

hedge risk.

• Real Options. Using derivatives and the Black Scholes and binomial models in

corporate decisions.

• Derivative mishaps. Lessons from derivatives for financial and non-financial

companies.


Scott Joslin is an Associate Professor of Finance at the USC Marshall School of Business.


His research focuses on capital markets, in particular, the study of bond and options markets

and their interaction with the macro economy. Prior to joining USC, he was on the faculty of

MIT's Sloan School of Management. He received his Ph.D. in Finance from Stanford

Graduate School of Business. He can be reached at [email protected]

FBE 560 - Mergers and Acquisitions

Course Objectives:

This course focuses on identifying ways to increase firm value through corporate restructuring.

Specific topics include: mergers and tender offers, spin-offs, carve-outs, divestitures, takeover

defense strategies, bankruptcy and bankruptcy acquisitions, international acquisitions, LOB's,

and leveraged buyouts. We will cover the theory, practice and empirical evidence related to each

of these topics. Emphasis will be placed on valuation, and analysis, understanding deal types,

understanding expectations on outcomes, transactional evaluation, legal issues, and strategic

considerations.

Classes will consist of a combination of lectures, class discussion and student case presentations.

Cases will be used to help students gain experience in analyzing financial problems, formulating

plans, making strategic decisions, and presenting the results of their work. At the end of this

course students should (1) understand alternative types of restructuring techniques and how each

can be used go increase shareholder valve (2) be able to fully evaluate restructuring transactions

and (3) have a broad understanding of the economic and social consequences of corporate

restructuring.

Course Deliverables: Upon successful completion of this course, students will be able to: (1) provide in-depth

evaluation of business scenarios to identify core economic and financial issues within a firm that

need change or optimization. This requires understanding what problems transactions solve, and

categorizing business scenarios into well-understood categories for which specific restructuring

strategies apply; (2) develop enhanced valuation skills to handle the complexity of restructuring

transactions, with a focus on cash flow forecasting, risk assessment, and discounting via WACC

or APV models; (3) work with teams of students to put together a sophisticated presentation (in

front of the class) and a professional write-up proposing a restructuring strategy and explaining

its consequences; and (4) understand and account for the economic and social consequences of

corporate restructuring, and acquire knowledge of the legal and tax environment that can further

value-maximize transactions.


Gerard Hoberg has taught merger and acquisitfons·artnemaster's·Ievetfod-4 years.-The· subject

matter is also core to his research area He also has 6 years on industry experience as a Vice

President at a transaction optimization firm prior to getting his PhD in Finance at Yale

University in 2004. The course draws both from his practical experience, case files, current

events, textbooks, and active research in corporate finance. Gerard's research interests include

corporate finance, mergers, IPO's payout policy, corporate liquidity, market structure and

financial crises. His work on mergers examines novel sources of synergies in the M&A market,

merger integration, and especially how mergers generate value in more innovative industries. His


work in IPOs examines the role of the prospectus, legal action, and the role of investment

banking firms in resolving IPO prices. Much of Hoberg's work also uses methods in

computational linguistics or other big data methods. Professor Hoberg can be reached at

[email protected]

FBE-563: Global Trade and Finance

Course Description: The goal of this course is to understand how the globalization of real and financial markets

changes the environment where businesses and investors operate and how this affects their

decisions. The course contains three parts. The first part reviews the process of economic and

financial integration in major geographical areas around the world including Europe, Asia and

the Americas. This part sets the stage for the second and third parts, which analyze the

implications of economic and financial integration for the operation of good and financial

markets.

The second part of the course examines the factors that motivate the process of integration in the

trade of goods, services and foreign direct investments. It analyzes the benefits and costs of free

trade and the policies that the government can use to affect international trade.

The third part of the course deals with international finance, that is, the trade in financial

securities. This part starts with the analysis of foreign exchange markets (foreign currencies) and

how businesses and investors can use these markets for speculative or hedging purposes. This

part of the course also studies international portfolio investments and the forces underlying

speculative attacks in international financial markets.

New for this course: The course has been revised and extended to cover two new topics:

1) Cryptocurrencies (Bitcoin, Ethereum, Litecoin, etc.)

2) The globalmarket for real estates

Cryptocurrencies are new forms of global currencies that are becoming more prevalent with the

advancement of technology and the globalization of financial markets. The globalization of

financial markets is also important for real estate markets as the increasing international mobility

of capital affects the local demand for real estates.

About the Instructor: Vincenzo Quadrini is James McN. Stancill Chair in Business Administration. He received his

Ph.D. in economics from the University of Pennsylvania. Prior to his current position, he has

been a faculty at New York University, Duke University, and Pompeu Fabra University. His

research is on Macro-finance, International Economics, Financial Contracts and

Entrepreneurship. He has several publications in major economics journals including American

Economic Review, Journal of Political Economy, and Review of Economic Studies. Professor

Quadrini can be reached at [email protected]

FBE 565 - Management of Real Estate Development: Feasibility Studies

Course Overview:



This course examines the process of real estate development by means of a real-world case study

and preparation of comprehensive development feasibility study. The contemporary practice of

real estate development involves the interrelated disciplines of design, market analysis and

finance, and this course provides a framework for integrating them in such a way as to maximize

the highest-and-best use for a particular vacant, or underutilized real estate asset.

There is an emphasis on teamwork in a consulting environment, and exploiting the unique talents

and experience that each student brings to the class and to the project.

The course is divided into two phases during the semester. During the first, students are

presented with materials, lectures and consultations with industry experts in order to provide a

framework for understanding the development process. During this “learning portion” of the

course, students form teams that gather basic information related to a project provided to the

class by a real estate industry “client”. Computer applications designed to address the complexity

of problem solving in development are also introduced during this phase. The baseline project

data - relating to such things as zoning, finance and deal structure, economics, site planning,

market competition and building design - becomes the basis for the second phase of the course in

which a complete feasibility study is prepared.

During this second phase, or “performance phase”, competitive teams are reassigned and use the

materials and methodology of Phase 1 to derive their versions of the best solution for the project.

Computer models that integrate design, market and financial data during the design process

become an integral portion of this phase of the course.

As the semester ends, Phase 2 teams prepare final feasibility studies, and present their work to a

team of industry and faculty adjudicators.


Mr. Tarnofsky brings over 20 years of executive level involvement in the development of

institutional quality commercial assets. As Co-founder of West Los Angeles based development

firm of Goldleaf Partners, he developed over 1,250,000 square feet of Class A commercial office

and retail space, a majority of which was completed in joint venture with institutional partners

such as Aldrich, Eastman & Waltch. Highlighted projects include an eight story 165,000 sq. ft.

office tower that now serves as corporate home for the Nadel Partnership, located at 1990 Bundy

in Los Angeles California and the La Cienega/Slauson Business Park, a 625,000 square foot

waterscape themed office park terraced over 15 acres of land. Mr. Tarnofsky also brings his

expertise in construction management in his role as Executive Vice President for ACTS. Mr.

Tarnofsky is an alumnus of the University of Southern California Marshall School Of Business

and received his MBA from the University of Colorado. He is a member of the Urban Land

Institute and an active member of the International Council of Shopping Centers. He can be


FBE 571 - Introduction to Financial Analysis: Practicum

Course Description:

The CF A (Chartered Financial Analyst) is a credential that has increasing value for

investment analysts and portfolio managers. To obtain the CFA credential, applicants must

pass each of the three levels in succession. Review courses such as the FBE 571 course


helps prepare for level 1 of the CFA.

FBE 571 is one of three courses that prepare students for the CFA Exam. The CFA Exam

has three levels: Level l, Level 2 and Level 3. FBE 571 prepares students to sit for the first

level CFA exam, which is administered by the CFA Institute.

Unlike most courses at Marshall, the FBE 571-572-573 sequence is taught by multiple

instructors, who each lecture on a topic that will appear on the CFA Exam.

Topics on which the instructors lecture, generally on Saturdays or on weeknight meetings,

include:

• Ethical and Professional Standards

• Quantitative Methods

• Economics

• Financial Reporting and Analysis

• Corporate Finance

• Equity Investments

• Fixed Income

• Derivatives

• Alternative Investments

• Portfolio Management and Wealth Planning

About the Instructor: Program Coordinator: Jim Cunningham writes the Final Exam in FBE 571, a set of

problems in solving application and calculations across the ten fields in the CFA Body of

Knowledge. Professor Cunningham has an MBA from the Booth School of Business at the

University of Chicago, and a Ph.D. in Economics from the University of Chicago. He

teaches in the Undergraduate program. He is a recipient of the Golden Apple Teaching

Award. He has taught at USC Marshall since 2008, and previously taught at UCLA and

Notre Dame. He can be reached at [email protected]

FBE 588--Advanced Real Estate Law

Course Overview:

This is survey course presenting practical legal knowledge of specific substantive real estate law

topics. The class will stress topics relevant to students who own real property, rent real property,

or work in the real estate industry. The course provides students with practical legal knowledge of

specific substantive real estate law topics. As every real estate deal is grounded upon an application

of legal principles, understanding these topics is important when making sound real estate decisions.

This course discusses the legal aspects of real estate sales and ownership including: real property

rights; forms of land ownership and land interests; multiunit ownership; real estate brokers;

commercial and residential leasing and related landlord tenant laws; financing, insuring, transferring

and selling real estate; requirements of real estate contracts; title, title insurance, zoning, land use,

and regulation and taxation of real property.


This course qualifies for educational credit for the California real estate broker's and salespersons

license. Blending both legal and ethical approaches to problem solving, the course material

includes:

* Real property rights and interests *Deeds, title, and closing

* Easements and other non-possessory rights *Defaults, workouts & foreclosures

* Fixtures and secured transactions *Ownership or real property

* Real property estates and interests *Multiunit dwellings and property

management

* Land descriptions *Residential & Commercial leases

* Agency and real estate brokers *Insuring real property

* The purchase contract probate *Transfers by operation of law and

gifts

* Valuation and financing of real estate *Transfers after death-wills,

interstate and probate

Learning Outcomes: At the conclusion of the course, students will have learned a substantial range of legal topics

within the real estate law environment. Students will have unproved their deductive reasoning

skills and knowledge of the basic and adv3:1ced topic within the subject matter presented.

Students will be able to identify and analyze legal issues u mg soph1st1cated approaches to

substantive law, case Jaw and regulations which will have been presented during class. There

are no prerequisites for this course

Highlights of anticipated class projects: • Tax benefits of alternative energy

• Wetlands restoration project

• Negotiation of a purchase and sale agreement

About the Instructor: Professor Kevin Fields is a practicing attorney specializing in business litigation and representing

clients in federal courts and administrative forums. He 1s also a licensed California broker. In

2012 he received Gamma Sigma Alpha's Professor of the Year Award. He is a co-author of

Contemporary Real Estate Law a real estate textbook for Undergraduate and Graduate business

schools that was released in 2013. Kevin can be reached at [email protected]

FBE 591 - Real Estate Finance and Investment

Course Overview: This course provides an introduction to income-producing real estate from the various

perspectives of finance, valuation, market analysis and development. Focusing on the analytical

techniques necessary to provide an understanding of properties in a market context, this course

provides essential information for those students interested in taking advanced real estate

courses, those planning careers in real estate, or for those interested in managing their own

property portfolios.



Students successfully completing this course will be able to: • Use industry-standard terminology and techniques for valuing income producing real estate

• Employ basic spreadsheet skills to analyze the income potential of a range of property types.

• Explain how the formal finance and market analysis concepts learned in the course are applied

in a practical context, by means of current event articles and case studies.

• Describe the roles of debt and equity in the structure of real estate transactions, as well as

syndications and partnerships. ·

• Perform an integrated "feasibility study", which evaluates the potential profitability of a new

development or investment project from the three perspectives of finance, design and market

analysis, demonstrating the concept of "highest and best use" for a particular property


Marco Giacoletti joined the Department of Finance and Business Economics in 2017, after

earning his PhD in Finance from the Stanford Graduate School of Business. His research

interests include asset pricing, macro-finance and household finance. He has recently received

the Cubist Systematic Strategies PhD Candidate Award for Outstanding Research, and his

research has been presented at the Western Finance Association and the American Finance

Association meetings. Professor Giacoletti can be reached at [email protected]

FBE 599: Real Estate Analysis and Computer Modeling

Course Description:

Students will be expected to input leas, building and market information into Argus Enterprise.

Students will be given different parameters and assumptions. Students will export the data into

Excel and perform cash flow projections. Students will solve for particular metrics including

Net Operating Income (NOi), Cash Flow (both before and after debt service), NOi Return,

Leverage and Unleveraged Cash Return, Debt Coverage Ratios, and Internal Rates of Return.

Students will provide an estimated value for the building. In addition to the excel file, students

will write an Executive Summary of the real estate opportunity.

Upon successful completion of the course, the prospective business or real estate

professional will be able to:

• Design, build and implement lease or building valuation models using Argus Enterprise

• Design, build and implement lease or building evaluation models using Microsoft Excel

• Perform practical analysis of the data provided by the Argus Enterprise and

Microsoft Excel models

• Present the data/ analysis to senior real estate executives

Course Objectives:

The objective of this course is to provide the prospective business or real estate professional

with the fundamental concepts and skills of real estate analysis and computer modeling.

Complete, comprehensive and high integrity analysis of the financial factors of a real estate

transaction is fundamental to real estate decision making. The foundation of all real estate is


understanding the impact of those various financial factors to the overall value of the building.

During this course, you will learn to review the analysis from all sides of the transaction -from

tenant, landlord, lender, developer, etc. The course will provide a balance of:

(I) gaining a proficiency in. Argus Enterprise and Excel, (2) the practical applications of the

data/ analysis and (3) the presentation of the data/ analysis in a concise, efficient and confident

manner.


Mark Sprague is a 21-year real estate veteran with vast expertise in accounting, corporate

finance, real estate finance, capital markets as well as a unique background in corporate real

estate portfolio management and strategic planning. He has extensive knowledge of the

economic and financial statement impact of various real estate transaction structures and

financing techniques. As head of CBRE's Consulting practice in Southern California, Mark

provides CBRE's brokerage teams and clients with a wide range of real estate and economic

consulting services. His ability to understand the implications of a transaction for all parties

enables Mark to develop effective negotiating strategies and value-added opportunities on

behalf of his clients. In his activities for corporations, L-3 Communication Corporation,

Southern California Edison, and Northern Trust, Mark provides day-to-day portfolio

management and quarterly reports throughout the client's management structure, i.e., reporting

to CFOs; tax and treasury groups; external auditors; and to human resource managers for space

planning/occupancy optimization. Professor Sprague can be reached at

[email protected]


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