2. 1 SESSION 2 GUIDANCE NOTES FOR SEMINAR IN FINANCE LEADING TO THESIS/SCRIPT Lectured by Prof. Dr. Ferdinand D. Saragih, MA

3. 2 1. AIMS The aims of the class seminar in finance in respect of its teaching are twofold: respect of its teaching are twofold: to provide an educational experience, encompassing depth of learning through the medium of finance to provide an educational experience, encompassing depth of learning through the medium of finance To provide an atmosphere in which students are motivated to conduct research in line with their thesis/script. To provide an atmosphere in which students are motivated to conduct research in line with their thesis/script.

4. 3 1. AIMS The class aims to: Flexibly respond to new demands and new developments arising from research and practice, and Flexibly respond to new demands and new developments arising from research and practice, and Cover relevant areas of finance in the context of existing and emerging issues at national and international level. Cover relevant areas of finance in the context of existing and emerging issues at national and international level.

5. 4 1. AIMS The class within the degree program is designed to encourage cognitive skills such that as the students move through the four levels of their programmes, they develop knowledge and comprehension, learn to apply that knowledge and comprehension and become versed in the deeper approach to learning evidenced by powers of analysis, synthesis and evaluation. The class within the degree program is designed to encourage cognitive skills such that as the students move through the four levels of their programmes, they develop knowledge and comprehension, learn to apply that knowledge and comprehension and become versed in the deeper approach to learning evidenced by powers of analysis, synthesis and evaluation.

6. 5 1. AIMS Analysis, synthesis and evaluation are transferable skills of value to students in their future life far wider than the individual subject areas covered. Other transferable skills include communication, quantification, interactional and interpersonal skills and the ability to clarify values are fundamental to the degree programmes. During the seminar class, students are encouraged to use their powers of reasoned argument to enable and empower them to identify with or challenge the material available on any subject. Analysis, synthesis and evaluation are transferable skills of value to students in their future life far wider than the individual subject areas covered. Other transferable skills include communication, quantification, interactional and interpersonal skills and the ability to clarify values are fundamental to the degree programmes. During the seminar class, students are encouraged to use their powers of reasoned argument to enable and empower them to identify with or challenge the material available on any subject.

7. 6 1. AIMS The class provides the opportunity to expand students’ knowledge of subject areas covered in the first three semesters of courses in finance and to explore new areas. The courses are designed to develop students’ approach to learning finance, by: The class provides the opportunity to expand students’ knowledge of subject areas covered in the first three semesters of courses in finance and to explore new areas. The courses are designed to develop students’ approach to learning finance, by: understanding material for students themselves rather than passively accepting the interpretation provided by others. understanding material for students themselves rather than passively accepting the interpretation provided by others. interacting vigorously and critically with relevant subject material. interacting vigorously and critically with relevant subject material.

8. 7 1. AIMS relating students’ ideas to their previous knowledge and experience. relating students’ ideas to their previous knowledge and experience. using organizing principles to integrate ideas. using organizing principles to integrate ideas. examining the logic and consistency of an argument. examining the logic and consistency of an argument. relating conclusion to evidence. relating conclusion to evidence. assembling evidence to support conclusions. assembling evidence to support conclusions.

9. 8 2. OVERVIEW The class seminar is an opportunity to activate and encourage a deeper approach to learning process. It is perhaps the most rewarding and enjoyable time at university. It is very different from previous years and can seem like very hard work, but if approached in a constructive, positive manner it offers the potential for personal as well as academic development. The class seminar is an opportunity to activate and encourage a deeper approach to learning process. It is perhaps the most rewarding and enjoyable time at university. It is very different from previous years and can seem like very hard work, but if approached in a constructive, positive manner it offers the potential for personal as well as academic development.

10. 9 3. BRIEF CLASS TOPICS Pricing of Securities in Financial Markets Pricing of Securities in Financial Markets The class will analyze theoretical developments related to the pricing of securities in financial markets and the empirical evidence in this regard. The topics covered in the class will be drawn from the following : The class will analyze theoretical developments related to the pricing of securities in financial markets and the empirical evidence in this regard. The topics covered in the class will be drawn from the following : Efficient markets hypothesis and its implication for share price behavior, portfolio theory, the capital asset pricing model, the arbitrage pricing model, pricing of bonds and money market securities, valuation of futures contracts, models for pricing options on stocks, indices, futures contracts and currencies, convertible securities, swaps, optimal hedging and issues related to market micostructure. Efficient markets hypothesis and its implication for share price behavior, portfolio theory, the capital asset pricing model, the arbitrage pricing model, pricing of bonds and money market securities, valuation of futures contracts, models for pricing options on stocks, indices, futures contracts and currencies, convertible securities, swaps, optimal hedging and issues related to market micostructure.

11. 10 3. BRIEF CLASS TOPICS Management of Investments in Financial Markets Management of Investments in Financial Markets The class will analyze the theory and practice related to the management of investments in financial markets. Topics covered in the class will be drawn from the following: The class will analyze the theory and practice related to the management of investments in financial markets. Topics covered in the class will be drawn from the following: Asset allocation models, international diversification, stock selection strategies, equity valuation models, theoretical role of earnings, forecasting of earnings, quantitative fundamental models, bond ratings, hedging strategies, arbitrage strategies, trading systems, use of derivative assets, dynamic hedging/portfolio insurance, failure prediction models, index fund management, pension fund management and the evaluation of portfolio performance. Asset allocation models, international diversification, stock selection strategies, equity valuation models, theoretical role of earnings, forecasting of earnings, quantitative fundamental models, bond ratings, hedging strategies, arbitrage strategies, trading systems, use of derivative assets, dynamic hedging/portfolio insurance, failure prediction models, index fund management, pension fund management and the evaluation of portfolio performance.

12. 11 3. BRIEF CLASS TOPICS Corporate Investment Theory and Policy Corporate Investment Theory and Policy The topics covered in the class will normally be drawn the following: The topics covered in the class will normally be drawn the following: Overview of capital investment theory under conditions of certainty and uncertainty, the real option approach to investment, techniques of adjusting for risk and uncertainty, strategic investment decisions and the usefulness of option pricing theory, mergers and acquisition, theories of the market for corporate control, including synergy and value creation, hubris and the winners curse, capital market response to merger and acquisitions, market efficiency and anomalies in the market for corporate control, ex-post performance of merged firms, investment policy and the value of the firm, interaction of financing and investment decisions, managerial incentives and corporate investment decisions, issues in corporate governance. Overview of capital investment theory under conditions of certainty and uncertainty, the real option approach to investment, techniques of adjusting for risk and uncertainty, strategic investment decisions and the usefulness of option pricing theory, mergers and acquisition, theories of the market for corporate control, including synergy and value creation, hubris and the winners curse, capital market response to merger and acquisitions, market efficiency and anomalies in the market for corporate control, ex-post performance of merged firms, investment policy and the value of the firm, interaction of financing and investment decisions, managerial incentives and corporate investment decisions, issues in corporate governance.

13. 12 3. BRIEF CLASS TOPICS Corporate Financial Theory and Policy Corporate Financial Theory and Policy The class will analyze the theory and practice related to corporate financial decisions. The topics covered in the class will be drawn from the following: The class will analyze the theory and practice related to corporate financial decisions. The topics covered in the class will be drawn from the following: The financial theory of agency: evidence and problems, corporate financial policy with respect to dividends, share repurchases, capital structure, leasing and new capital issues. The financial theory of agency: evidence and problems, corporate financial policy with respect to dividends, share repurchases, capital structure, leasing and new capital issues.

14. 13 4.LINK SEMINAR WITH CHOICE OF THESIS/SCRIPT Having completed their courses, students must do their script in a finance related area. Students may choose either of their joint subjects for a script topic. If they prefer to do a script in their joint subject then the program involved will provide them with the necessary information. I wish to emphasize that the program in which students choose to do their script is their choice. Having completed their courses, students must do their script in a finance related area. Students may choose either of their joint subjects for a script topic. If they prefer to do a script in their joint subject then the program involved will provide them with the necessary information. I wish to emphasize that the program in which students choose to do their script is their choice.

15. 14 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE Script Guidance Script Guidance These notes are intended to give student some ideas for managing her/his script. They contain a number of generalization which may make them less applicable to some topics. If student has any queries about any of the issues raised she/he should discuss them with her/his supervisor. These notes are intended to give student some ideas for managing her/his script. They contain a number of generalization which may make them less applicable to some topics. If student has any queries about any of the issues raised she/he should discuss them with her/his supervisor.

16. 15 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE Why write a script? Why write a script? The class in finance is supposed to develop students’ understanding of the theory underlying the subject. Students’ scripts are an important part of this learning process. The process of identifying a topic, researching it and writing up students’ results provide an opportunity to develop students’ critical powers. It also gives students an insight into the process whereby the finance literature is developed. The class in finance is supposed to develop students’ understanding of the theory underlying the subject. Students’ scripts are an important part of this learning process. The process of identifying a topic, researching it and writing up students’ results provide an opportunity to develop students’ critical powers. It also gives students an insight into the process whereby the finance literature is developed.

17. 16 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE What exactly is a script? What exactly is a script? How long is a piece of string? In the BROADEST possible terms a script is a piece of original writing on a subject of student’s choice. It should add something to the existing literature (without being over ambitious). Student might collect some empirical evidence and use it in the investigation of some practical problem or the student might summarize the existing literature on a topic and identify areas which are weak or which require further research. Most scripts involve an element of both approaches How long is a piece of string? In the BROADEST possible terms a script is a piece of original writing on a subject of student’s choice. It should add something to the existing literature (without being over ambitious). Student might collect some empirical evidence and use it in the investigation of some practical problem or the student might summarize the existing literature on a topic and identify areas which are weak or which require further research. Most scripts involve an element of both approaches

18. 17 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE Choosing a topic Choosing a topic Choosing a topic is one of the most difficult aspects of the project. It is worth seeking advice from lectures. To help student pick a topic, try the following exercises: Choosing a topic is one of the most difficult aspects of the project. It is worth seeking advice from lectures. To help student pick a topic, try the following exercises: - Was there a particular topic that captured your interest during your - Was there a particular topic that captured your interest during your previous classes? previous classes? - what things interest you outside university? - what things interest you outside university? - is there an issue that interests you currently in the academic press or - is there an issue that interests you currently in the academic press or contemporary events in the news? contemporary events in the news? - Can you see a link between two topics that other people may not be - Can you see a link between two topics that other people may not be aware of? aware of?

19. 18 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE Support during the script Support during the script Discuss your program of meeting with your assigned supervisor. It is important that you submit written work periodically during the semester, starting as soon as possible and keep your supervisor informed of your progress, plans and any problems as soon as they arise. Discuss your program of meeting with your assigned supervisor. It is important that you submit written work periodically during the semester, starting as soon as possible and keep your supervisor informed of your progress, plans and any problems as soon as they arise.

20. 19 5. THE SCRIPT IS AN EXTREMLY IMPORTANT PART OF THE COURSE Length and Structure of the script Length and Structure of the script There is no upper word limit on the script, however, more words does not evaluate with more marks. There is no optimum length for a script, it very much depend on the topic and research methodology adopted. If a script is less than 10,000 words it is unlikely to contain sufficient evidence of meeting the script objectives, unless it is exceptionally well structured and argued. As a rule of thumb scripts would be expected to be between 15,000 to 20,000 words. All scripts submitted must include a word count. Appendices may be used to provide supporting evidence but will not contribute directly to the assessment of the script. Students may wish to include in appendices evidence that confirm the originality of their work of illustrates points of principles set out the main text. There is no upper word limit on the script, however, more words does not evaluate with more marks. There is no optimum length for a script, it very much depend on the topic and research methodology adopted. If a script is less than 10,000 words it is unlikely to contain sufficient evidence of meeting the script objectives, unless it is exceptionally well structured and argued. As a rule of thumb scripts would be expected to be between 15,000 to 20,000 words. All scripts submitted must include a word count. Appendices may be used to provide supporting evidence but will not contribute directly to the assessment of the script. Students may wish to include in appendices evidence that confirm the originality of their work of illustrates points of principles set out the main text.

21. 20 6. THE OTLINE OF A SCRIPT Introduction Introduction Overview where student identify the research questions and signpost her/his approach and structure of the thesis. Overview where student identify the research questions and signpost her/his approach and structure of the thesis. Literature Review Literature Review This section will evaluate the key relevant articles of student’s topic and outline the framework or principal theories she/he will use in the rest of the script. This section will evaluate the key relevant articles of student’s topic and outline the framework or principal theories she/he will use in the rest of the script. Methodology Methodology This section will be used to describe the methods student has chosen to gather the evidence to help answer her/his research question. It should also be used to identify any limitations associated with her/his research methods and explain why she/he chooses it. This section will be used to describe the methods student has chosen to gather the evidence to help answer her/his research question. It should also be used to identify any limitations associated with her/his research methods and explain why she/he chooses it.

22. 21 6. THE OTLINE OF A SCRIPT Empirical Data Empirical Data This section is used to describe and present any empirical evidence student has gathered or constructed. This section could also be used to evaluate the empirical data using the framework described in the literature review section. This section is used to describe and present any empirical evidence student has gathered or constructed. This section could also be used to evaluate the empirical data using the framework described in the literature review section. Conclusion Conclusion This should be used to present any conclusions that can be drawn from the previous sections, further research requirements and an answer to student’s research question. Please note that a successful script does not require a positive or negative answer to the research question. The process of investigating the research question is an important in a time-limited project such as the script. This should be used to present any conclusions that can be drawn from the previous sections, further research requirements and an answer to student’s research question. Please note that a successful script does not require a positive or negative answer to the research question. The process of investigating the research question is an important in a time-limited project such as the script.

23. 22 7. A REASONABLE METHOD Outline of the topic and an explanation of its importance Outline of the topic and an explanation of its importance Discuss the theory underlying student’s topic and summarize and comment on any relevant literature Discuss the theory underlying student’s topic and summarize and comment on any relevant literature Describe the empirical work/case study which student has done and give an overview of the main findings. Describe the empirical work/case study which student has done and give an overview of the main findings. Most importantly, provide a clear statement of the research findings. What changes should be introduced in the light of the script findings? What further work could be undertaken? Most importantly, provide a clear statement of the research findings. What changes should be introduced in the light of the script findings? What further work could be undertaken? All of the above points may sound rather daunting. Student should find that, once she/he gets started, it is not too difficult to achieve the objectives described Above. All of the above points may sound rather daunting. Student should find that, once she/he gets started, it is not too difficult to achieve the objectives described Above.

24. 23 The End of This Session Thank you