Fall 2010
Introduction to the Practice of Finance
(15.403)
Wednesdays, 4:00 – 6:00
Room E51-3251
Instructor
John Minahan
jminahan@mit.edu
E62-684
Teaching Assistant
Nicole Zenel
nzenel@mit.edu
Purpose
This course has several objectives:
• Give students an overview of how the discipline of finance is practiced
• Facilitate students developing “maps” of how the different sectors of the financial
services industries are connected
• Facilitate understanding of what it means to be a finance professional
• Provide a venue for group learning and cohort building
Course Requirements and Grading
Requirements
• Attendance is required once the track “shopping period” ends on September 15th, and
is strongly encouraged during the shopping period. Out of respect for our guest
speakers, please arrive on time and stay for the duration of each session.
• Introduce yourself to me with a short (2-3 pages) reflection paper. Tell me about
yourself and how you came to be interested in finance; describe any history you have
with finance, and what your career interests are. It is okay to start with your
statement of purpose. Submit hard copy to TA in 9/22 class.
• Participation in at least one Onsite Day: New York Finance Day, London Banking
Day, Boston Investment Management Day, Asia Finance Trek
• A project is optional (but the highest grade you can get without a project is B+.)
Grading
Attendance
Reflection paper
Project
1
80%
9%
11%
The first two classes will be held in Wong Auditorium.
Projects
Students are encouraged but not required to participate in a project. Potential projects
are:
1. Fill in a section of the financial services map.
The different sectors of the financial service industry are interconnected. By
“mapping” I mean illustrating the connections among subsectors, using whatever
imperfect information one has or can gather and whatever graphic software one
knows or can learn. Since each map will cover a limited part of the overall landscape,
different student’s maps potentially can be connected into a larger map.
Mapping should be done in groups of 3 – 5.
2. Moderate a panel discussion
Each panel discussion will require moderation. The tasks of a moderator include:
• Researching the background of the speakers.
• Having a point of view on what the class can learn from each speaker and
formulating this into questions.
• Hosting a pre-meeting or conference call to develop themes for the discussion
• Introducing the speakers and moderating the discussion
• Taking the speakers out to dinner
Moderating should be done in groups of 3 – 4.
3. Write an addition reflection paper
This could be one additional paper of 4-5 pages or a series of shorter papers which
serve as a dialogue. Research is not necessary but nor is it prohibited.
4. Student proposal.
I am open to any proposals students may have for a project.
Class Schedule
Date
Topics and Assignments
Sept 8
Introduction
• Overview of Finance Track
• Overview of 15.403
• The career landscape in finance
Sept 15
Observations on the Future of Financial Services: A Functional Perspective
Sept 22
Professionalism
• What is a profession?
• Is finance a profession?
• Finance professional associations
• Planning your professional life
Reflection paper due
Sept 29
Corporate Finance
• The day-to-day finance functions
• Raising capital
• Using capital
Oct 6
Wall Street
• Overview of the roles Wall Street plays in the economy
• How Wall Street has changed
• How Wall Street might change
Oct 13
No class – midterm week
Oct 20
No class – SIP week
Oct 21/22
New York Finance Day
Oct 27
Investment Management
• The investment management business
• The changing relationship between the buy side and sell side
• Quantitative vs fundamental approaches to security selection
Nov 3
Supply chain/vendor perspective
• Software, data, “platforms”
• Analytics vendors
• Exchanges and other trading venues
Nov 10
Asset Owner Perspective
• Institutional vs individual
• Pension versus endowment
Nov 17
Distribution/allocator perspective
• The role of consultants
• Distribution channels
• Funds of funds
Nov 19/20
Technical Interview Prep
Nov 24
No class – Thanksgiving break
Nov 25/26
London Banking Days
Dec 1
Venture Capital and Private Equity
• The stages of venture capital
• Private equity investing
• Managers and Funds
• The exit
Projects due
Dec 8
Student presentations
Dec 10
Boston Investment Management Day
Jan tbd
Asian Finance Trek
Onsite Days
New York Finance Day gives 1st year MBAs an opportunity to meet with alumni and
corporate recruiters at multiple investment banks. Through onsite visits, informal
presentations, lunch meetings and an alumni reception, you will learn how an investment
bank works, what roles the different firms will be recruiting MBAs for, and make
important connections to support your summer internship search. New York Finance Day
is organized by the Career Development Office in partnership with the Finance Track and
the Finance and Sales & Trading Clubs.
London Banking Days are held on the US Thanksgiving holiday period. This event is coorganized by the investment banks and a select group of our peer schools (HBS,
Columbia, Chicago, Wharton, NYU). Over the course of these two days, you will
explore opportunities in investment banking, sales & trading, and private wealth
management with as many as 12 banks. London Banking Days is a must-attend event if
you plan to pursue an internship with an investment bank in London. London Banking
Days is organized by the career offices at each of the peer schools.
Boston Investment Management Day gives you the insider’s view into three of the most
prominent investment management firms in Boston: Fidelity, Wellington Management
and MFS. This day is created just for MIT Sloan students to visit each firm, learn about
their business, and meet alumni and recruiters, and is organized by the Career
Development Office in partnership with the Investment Management Club.
Asian Finance Trek includes 1st and 2nd year MBAs, as well as Master of Finance
students, on site visits to Hong Kong and other Asian cities (Beijing, Shanghai and
Singapore) to visit with a range of financial services firms. 1st year MBAs seeking an
internship in an investment bank in Hong Kong should attend the Hong Kong portion of
the Trek the first week of January to meet alumni and recruiters before the Dedicated
Interview Period for summer internships begins on campus in the second week of
January. Asian Finance Trek is led by the Career Development Office in partnership with
the in Finance Track, Master of Finance Program, and the Asian Business Club.