BFC1001: Foundations of Finance

6%: Out-of-class learning tasks
6%: In-class learning tasks
5%: Team Business Presentation
18%: Mid-Semester test
15%: Team Assignment
50%: Exam

Course Structure:
Topic 1 - What is finance - gives a brief introduction to finance as well as calculating the most important ratio, the Weighted Average Cost of Capital (WACC)
Topic 2 - Financial markets and regulation - gives an introduction to the RBA, APRA and ASIC
Topic 3 - Value, time and money - a calculation topic that shows that money today is worth more than money in the future, via discounting. Also shows how to calculate present and future values and EAR
Topic 4 - Wealth, time and money - Gives an intro about annuities that are either ordinary or annuity due, as well as how to find the present value and future value of each. Further, provides background to an equivalent annual annuity (EAA), which is a lump sum that is broken down into an annuity with equal payments or receipts for a finite time, which can then be compared to a regular annuity by looking at payments received or paid per time period.
Topic 5 - Financial choices and decisions (Capital budgeting) - Key topic as it looks at how to calculate Net Present Value (NPV) and Internal Rate of Return (IRR), which are the extra cash flow you would earn if all cash flows are discounted back to time period 0, as well as the discount rate that would lead to your NPV being 0. Seemed to be understood well by most students, as it was the first question on the short answer on the exam, reflected by an average mark of 16.5/20 on that question.
Topic 6 - Applications of finance - Applies annuities to mortgages and superannuation, as well as provided a discussion into managed funds.
Topic 7 - Financial Institutions - A theory based topic that expands on topic 2 especially in the are of the Capital Adequacy Ratio (CAR), which is the minimum amount of capital that the banks must hold in reserves to cover for unexpected situations
Topic 8 - Debt and markets (Debt securities) - Highlighted differences between money and bond markets, what securities to use for each and relevant formulas for calculating both. Was covered on the exam through calculating bonds with 6 month coupon rates.
Topic 9 - Stock and markets (Equity securities) - talks about differences between ordinary and preference shares, what formulas to use to calculate present value (PV) for each as well as using the capital asset pricing model (CAPM) as a relevant discount tool for calculating share prices. Was reinforced in the exam through calculating CAPM and PV of shares
Topic 10 - Risk & financial protection - Explains differences between option, future and forward contracts. Mainly provides background knowledge for BFC2751 (Derivatives) as to how to calculate preferred contract choices. I found this to be the toughest topic of the course, as with it being the last question on the exam, it was difficult to cover and understand all the information being provided from it. This was reflected by the average mark of 7.6/15 on that question on the exam. Mainly compared between if you hedged or speculated or did not.
Topic 11 - Finance & Globalisation - Focused on foreign exchange and whether or not to use the buy/sell rate in calculating exchanges. Originally I found this to be a difficult topic, however after repetition made it seem far more simple. Helps when doing BFC3240 - International Finance.

I found this subject to be a really good introduction for BFC2140 - Corporate Finance, as it provided a background knowledge of finance which was compulsory for my finance major.

Overall, this subject was structured incredibly well. Basically it utilised a flipped learning approach, where you attend a lecture, learn content for half of it and for the remaining half answer multiple choice or short answer questions that appear from the projector to your device - via the learning catalytics website. Then you head home and take part in self-study quizzes which form part of your out-of-class learning tasks, which were normally very simple and offering unlimited attempts, so it was easy to do well in the first place in regards to those quizzes. Then you went to your workshop the following week, (as lectures were held on the Thursday and Friday of the week before, so workshops the following week covered that week's topic). That then consolidated the information learnt in the pre-loads from the week before, as it enabled me to correct all my information learnt in the previous pre-load.

As said previously, same structure as the mid-sem with 10MCQ's and 6 short answer questions. I found the 2hr timeframe to be just enough time to get all the questions done, however I managed to do really well in this which contributed to my higher than expected unit result. Therefore, I would say that it was a fair exam as it was able to piece together all the knowledge taught throughout the semester, especially with Topics 8-12, and bring them all together into a well-structured exam.
Overall, I would recommend this subject if anyone is looking to do a finance major or just wants a brief intro to finance, as it provides a good breadth of knowledge into what most of the units in the finance faculty would cover, such as BFC2340 or BFC3241 (Debt markets and securities & equities and investment analysis).

Dr Jason Choo

The mid-sem mimicked the final exam, by having the same structure with 10MCQ's and 6 short answer questions, but only covered topics 1-7. I found myself to be a bit rushed for this, as I barely finished in time, which was reflected by my overall mark. However, it was a great way to get into calculation questions and ensure that we were well prepared for the final exam.

Yes, 2016 Sem 2 and 2017 Sem 1 exams provided

4.5 out of 5

Yes, with screen capture

Using the same groups as the team business presentation, we had to record a 5 minute video and post on YouTube or other online sharing websites, as well as write a 2000 word report as to whether or not the RBA would change the cash rate, by providing 3 factors which influence the RBA's decision to change the cash rate. Doing this in the mid-sem break, I also found there to be not be enough time to prepare for this, which led to a rushed video and report, also contributing to my lower mark than predicted. Additionally, I found very little relevance with this assignment compared to the topics being taught, however it was an interesting way to take an outside look at how finance can impact the Australian economy.

Groups (of max size 4 but not less than 3) were formed outside of class, or by posting on Moodle requesting team members. There were no restrictions on groups coming from the same workshop, so you could have formed a group with anyone in the unit. Once your team had registered, you were given a topic which you had a couple of weeks to prepare for, and then presented this in front of a tutor from the BFC1001 staff panel, which a group representative booked your team into. Since this was a finance faculty unit, you had to dress in full business attire when presenting, which was kind of a pain but no issue in the first place to deal with. This was a nice way to get an introduction into working with a team and my topic worked out well, so a great introduction into a first assignment.

Foundations of Finance 9th edition Global Edition (Keown, Martin & Petty) - Booklist says it is compulsory but since it is an American version that is used in an Australian finance topic, I would not buy it unless you need some consolidation of your work that is covered in the pre-load.

1hr lecture (pre-load) per week - compulsory for attendance marks
2hr workshop (compulsory) per week

Semester 2, 2017

85 HD