what are the subjects in mba finance

Finance is a very popular specialization for MBA students. Finance offers many lucrative prospects post mba and it is also a popular specialization among the CA professionals. Some of the popular MBA finance course in India are MBA from IIM Calcutta, IIM Bangalore, IIM Ahmedabad, SP Jain and IGNOU. But before you take up this stream or join the schools that are strong in finance placements, it is important to understand which subjects are taught in MBA finance.

First Year in MBA finance

Many courses taught in the first year are common across different streams in MBA. But there are some core finance subjects taught –

  1. Microeconomics – Though not a core finance subject economics is very important to understand a lot of concepts in finance. This subject touches upon various concepts like demand and supply, pricing, concept of marginal cost and marginal profit and so on. Very mathematical in approach, this subject introduces the students to how economics works at a micro level.
  2. Macroeconomics – Going beyond the basics of supply and demand, this subject teaches the students the concepts behind currency exchange rates, account deficit and trade deficit, how economies of nations affect the monetary policies. While this subject introduces the students to many macro economical factors, understanding the theories is challenging.
  3. Investment Analysis – As part of the core terms, this subject teaches the students how to evaluate various options of investments including fixed income, and equities. It teaches the important concept of efficient frontier, market pricing mechanism, price discovery and related topics. This subjects is a foundation course for many advanced concepts in finance.
  4. Statistics – Again, while this course is not directly related to finance, understanding of statistics is very important to grasp more difficult concepts in finance. It introduces the students to the basics of mean, median, mode, statistical distributions, hypothesis testing. It also offers an opportunity to master some of the popular statistical analysis tools.
  5. Mergers and acquisitions – This course teaches various concepts involved in acquisition of one business entity by another. The focus is mainly on valuation methods like free cash flow, ratio multiples and to understand the synergies behind these transactions. The course requires strong understanding of accounting principles. This is also one of the favourite course among finance students partly due to the fact that many aspiring students want to take up jobs in investment banking.
  6. Corporate finance – The course builds on the accounting concepts and tries to expose students to applied side of it. The core concept taught are capital structure, value of a firm, and financial policies.

Second year in MBA finance

The second year mostly consists of the elective subjects chosen by the students. Some of the popular finance electives are discussed below.

  1. Fixed Income – In this subject the students get the study many fixed income securities in details like bond, government bond, corporate bonds. The students are taught to value these securities using various methods like net present value. This subject is calculation intensive and requires strong understanding of maths.
  2. Options and Futures – Like fixed income, this course is a basic course in valuation of equity instruments and derivatives. The course teaches concept in options and futures valuations, how derivative markets work, pricing of derivatives and trading, and valuation methods for exotic derivatives.
  3. Real estate management – The course teaches the students concepts in real estate investment. This includes valuation of a property and various real estate investment entities like REITs.
  4. Behavioural Finance – This topic teaches the complex field of effect of human behaviour on pricing of securities. The focus is understanding that individual try to maximize their returns but do not always act rational.

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