List of Sub Areas
List of Sub Areas proposed to offered by Dept of Economics & Finance at Pilani campus
1. Corporate Finance
Content A
Concepts and techniques of financial management decision; valuation of a firm's stock;investment in assets and required returns; financing and dividend policies, working capital management, management of cash, management of accounts receivable; inventory management, short and intermediate term financing, financial analysis, financial ratio analysis, funds analysis and financial forecasting, operating and financial leverages.
Content B
Concepts in valuation - time value of money; NPV, IRR, project feasibility, budgeting, long term investment decisions, long term financing decisions (LT & ST), capital structure, risk analysis; principles of corporate taxation, income tax, capital gains tax, tax laws and provisions.
2. Investments
Content A
Introduction to investment and securities; profile of financial assets; new issue market or primary market, initial public offerings (IPO); secondary market; trading and settlement procedures; listing requirements; framework of risk & return; fundamental analysis-economy, industry; company analysis; stock evaluation models; multiple holding period and multiple growth rate; bond analysis and bond management strategies; mutual funds; technical analysis; efficient market theory; portfolio management; Markowitz model; Sharpe’s Single Index model; capital asset pricing model; financial derivatives options & futures.
Content B
Value maximization, stakeholder theory, and corporate objective function: value creation – ways and means, business analysis: The techniques of strategy and competitive analysis, value chain analysis for competitive advantages, business valuation – approaches and methods, the dark side of valuation: strategic investment decisions; SEBI Regulations w r t corporate governance; insider trading; fraudulent and unfair trade practices, and substantial acquisitions & takeovers;
3. Financial Economics and Financial Engineering.
Content A
Functions and operations of capital market, analysis of consumption-investment decisions of investors, diversification and portfolio selection, valuation theory and equilibrium pricing of risky assets, theory of efficient markets and investment and financing decisions of the firm. Expected utility theory; stochastic dominance; portfolio frontiers; mutual fund separation; asset pricing model; arbitrage pricing theory; Arrow-Debreu theory; dynamic spanning; options; rational expectations; financial signaling.
Content B
Introduction; Review of Markets, Players, and Conventions; Cash Flow Engineering with Forward Contracts; Engineering Simple Interest Rate Derivatives; Swap Engineering; Report Market Strategies; Dynamic Replication Methods and Synthetics; Mechanics of Options; Options Engineering with Applications; Pricing Tools; Applications of Fundamental Theorem of Finance; Fixed Income Engineering; Tools for Volatility Engineering: Volatility Swaps and Volatility Trading; Engineering of Equity Instruments: Pricing and Replication, computational methods such as Monte Carlo Simulation.
4. Applied Econometrics and Quantitative Techniques in Economics and Finance.
Content A
Specification of simple linear regression model, least square method of estimation, classical assumptions, general and confidence approach to hypothesis testing. Specification of Models; estimation of single equation economic models and related problems; Auto -correlation, multicollinearity and hetroscadasticity, forecasting and verification; estimation methods and problems in simultaneous equation systems.
Content B
Multiple regression analysis; analysis of generalized linear and nonlinear models; instrumental variables; maximum likelihood, generalized method of moments (GMM), and two step estimation methods; simultaneous equation models; time series processes; identification and estimation of time series models; techniques for assessing model fit; forecasting; time series analysis and models of expectations; univariate time series analysis, stationary vs. non-stationary series; ARIMA, GARCH, VAR, cointegration, granger causality, error correction and limited dependent variable models; auto regressive distributed lagged variable models multivariate time series analysis; dynamic models; analysis of panel data, balanced and unbalanced panel data, mixed, fixed and random effect models.
5. Macroeconomics
Content A
Systems of national accounts; input-output systems; flow of fund systems; monetary circulation and exchange; basic model of income determination; classical macroeconomic models; obstacles of full employment; Keynes model, derivation of IS-LM functions; three sector model; four sector model; inflation and Phillips curve; real business cycles and new Keynesian economics; monetary policy, fiscal stabilization policy; consumption hypothesis; absolute income hypothesis, permanent income hypothesis, life-cycle income hypothesis, relative income hypothesis, investment models; money supply and money demand.
Content B
Overview of the financial system, interest rate and their role in valuation, fluctuation in interest rate, risk and term structure of interest rate, rational expectation and efficient market hypothesis, central banking and the conduct of monetary policy, money supply and credit creation, monetary transmission mechanisms, fundamentals of financial institutions, banking and management of financial institutions, commercial banking industry, risk management in financial institutions, credit risk, analysis of various financial and economic crisis.
6. Microeconomics
Content A
Consumer behavior; production function and linear programming applications, derivation of cost and supply functions, markets and market structures
Content B
Commodity pricing under imperfect market structures, factor pricing, multimarket equilibrium, optimization over time, welfare optimization, game theory applications, industrial organization.
7. Public Finance and Policy
Content A
Role of Government in modern economy, Theory of Public good and public choice; public goods and externalities, equity in distribution, Public Expenditure and Macro-economy: Determining optimal size of government, financing of public expenditure, debt versus tax financing, impact of public expenditure on the level and composition of output and employment, Government budget and cost benefit analysis, Taxation; Direct and Indirect taxes, efficiency and equity, tax incidence, models of taxation incidence, theory of optimal taxation, recent developments in theory of taxation, evolution of tax structures, tax evasion and avoidance, designing of modern tax system, reforms in direct and indirect taxes, value added tax, fiscal federalism, designing optimal government expenditure policy; Fiscal Policy Issues: Budget deficit and public debt, interdependence of fiscal and monetary policies, theory of inter-governmental transfers, theory and policy of subsidies, theory of fiscal federalism, issues of equity and efficiency, role of planning and finance commission, goods and services tax in India, new direct tax code, role of central and state FRBMs.
Content B
Introduction to of economic analysis; economic tools in valuing outcomes; measuring outcomes in policies and programme; policy making; the market and the public policy, policy framework and regulation, market and government issues, distribution and policy analysis; applications in tax policies, welfare policies, government policies relating to contracting, health, education, labour and employment, energy policy, competition policy, gender, rural-urban development, food security, climate change, infrastructure policy, financial and trade policy
8. International Economics
Content A
The international economy; early trade theories; comparative advantage model; neo-classical trade theories; gains from trade; offer curves, terms of trade; Edge-worth box, factor endowments and the Heckscher-Ohlin model; alternative models of trade and intra-industry trade; the imitation-lag hypothesis; product cycle theory; international trade and economic growth; international trade policy; tariff, non-tariff trade barriers, economic integration, international trade and economic development.
Content B
International factor movements; foreign direct investment and multinational corporations; protection; GATT & WTO; the balance of payments accounts; balance of payments equilibrium; economic policy in the open economy, balance of payment accounting, foreign exchange markets and exchange rates, exchange rate determination, open economy macroeconomics; income and price adjustment mechanisms, adjustment policies.
An Institute of Eminence
