MBA 610 "teams"

Reposted with deletions...


Now that other issues have been settled (a post will follow tonight), I would like to make teh teams known.

The cases will done in week 14. Details are on the class website.

Monday Class

Team 1

Rust, Brodhead, Carucac, Fitzpatrick, Purdy

Team 2

Brtko, Brecht, DeVay, Krishnaswamy, DeHaven

Team 3

Gray, Walsh, Patenella, Arcangeli, Spaulding

Team 4

Cullen, Domboski, Neri, Phillips, Brown, Lucas

Team 5

Castenada, O’Rourke, Erickson, Tingley, Harper

Team 6

Bovee, Bradley, Fletcher, McElligot, Szymcanicz

Thursday Class

Team 1

Zimmer, Kistner, Monteleone, Stavish

Team 2

Overs, Benedict, Bilotta, Hollebeke

Team 3

Auteritano, Plants, Johnson, Reagan

Team 4

Haggerman, Shufran, Kapersky, Buttles

Team 5

Lulas, Bubbs, Gilmartin, Castro

Team 6

Warning, Denine, Tandle, Elliott

Update on the 610 test situation

First of all thank you for the many emails and instant messages that encouraged me to pursue this. While it is depressing that this situation has arisen, I am encouraged by the fact that so many of you are concerned about it and think that it is wrong.

Unfortunately the issue has not resolved itself. The parties did not come forward. So after further attempts to figure out how this could possibly have happened at random failed, I decided to fall back on statistics.

This afternoon we entered all of the multiple choice answers for everyone who took the same form as the questionable tests (and gee that was fun!--NOT). Once this was done, a correlation matrix was calculated. Because the scores are not normally distributed I will report the median rather than the mean. The median correlation was about a .27 with a standard error of about .07. The highest? Above a .96 on the exams in question. This more or less convinced me there is a problem.

After these calculations, I notified Dr. Peterson and Dean Fischer. We will meet soon to discuss the next steps in the process.

I will keep you informed.

Thanks for your patience on this important matter. Remember it is more important to get it right than to act quickly.

MBA 610 tests are corrected

Well they are done. :)

I will give you all of the details in class, but overall they were pretty good :)

I do have a few concerns however. Namely it was suggested to me that there may have been cheating on the exam.

Thus, a few comments:

1. I will "up the bounty" on evidence. There will now be a 200 point reward.
2. I am entering the actual answers of students to look for extremely high correlations of answers. However, just eyeballing it, it appears that there may be a problem with a couple of students.
3. If you turn yourself in, the punishment will be much less severe.

You have to understand, I do not want to believe that anyone cheated. My prior belief is that you are innocent. However, if I am able to prove that cheating occurred, then I will be left with no choice but to take it to the Dean and the VP of academic affairs. This will force you to retake the class (which will really screw up some of your job plans!).

So, if you did cheat, please come forward. I will be much less harsh on those who self-report.

(I learned that from the NCAA ;) )

MBA 610 Test Info

Ok, after hearing from a few of you I have decided that moving the exam would not be fair since some people have prior commitments the following week as well.

BUT before you all panic and there is an option!!! I will also offer the exam on Friday March 11th (as in 311) . This optional exam will be in Murphy Aud C from 12:31 to 3:11 (hey it must be a sign or something!).

This later time will be available for the Thursday and Monday class, HOWEVER, I will need a count before hand. Thus, if you plan on taking the test on the Friday, please notify me by noon on Monday 3/7/05. Otherwise I will assume you will be taking the exam with your class.

Also some students have requested more suggested problems to help prepare for the test following spring break:

13.6, 13.17, 13.20, 13.22
14.8, 14.4, 14.11
15.1, 15.10, 15.14, 15.17 15.21, 15.22
16.13, 16.6, 16.4, 16.8, 16.9
17.5, 17.6,

Also, take a look at the test page on financeprofessor.com:
http://www.financeprofessor.com/tests/testmainpage.html

Finally it was suggested to me that I offer a review session prior to break. Not wanting to stand in the way of students trying to learn more, I agreed. It will be at 12:30 to 1:30 on this FRIDAY (2/25/05) in Murphy C. If you are coming and are willing to take notes to put online, I am sure some of your classmates would appreciate it!

more comments on 610 class

This is TO EVERYONE in MBA 610

Whew. It appears the last blog entry did get people’s attention. While I will try to address several topics in this entry, the largest thing I want to stress is that I realize the majority of you are doing the work. Thus the last blog entry was not really aimed at you. This one is.

From the second I left class last Monday I began to think of how to say what I wanted to the class. I had much of the plan constructed before arriving home, but I wanted to sleep on it so as to not sound too harsh. Moreover, I then wanted to respond sooner but opted to wait until the whole class had a chance to see the original entry untempered by further explanation.

Why was I upset? It was not that the grades were poor. Sure I felt that you should have done better but I can live with an occasional poor performance. (and I do realize that it was Valentine’s Day and a Monday after Alumni Weekend neither of which should matter but both do). I was not even upset about people complaining about the workload. I know it is heavy. It is supposed to be. I have thick enough skin to take the criticism.

What did upset me was the fact that during the class more and more people seemed to be giving up. Essentially saying that they could not do it. This is totally false! I continue to have no doubt that you can all do this! And in fact many of you are doing it.

As you all know I love sports, so let’s talk sports for a second. The talent difference between a good team and a bad team is often very minor. What does separate the good from the bad is often attitude. It is the coach’s job to make sure that the athletes have a good attitude and are working towards a common goal.

Both good and bad attitudes are contagious. That is why some athletes with great potential are seen as “cancers” to teams. These players detract from the performances of those around them.
Classes are much like teams. When a few people give up it makes it easier and easier for others to do so as well. When one person develops the attitude that “we don’t want to do the readings”, others quickly adopt that attitude. That is why I was so upset when I saw the “I don’t care” attitude.

To those of you who think my standards (or demands) are too high, I respectfully disagree. Yes I understand that you are busy and have many demands on your time. I also realize that I might ask for more from you than other teachers, but that is because I am convinced that people who attend SBU deserve the best education that money can buy and I am equally convinced that with a bit more effort you can all amaze yourself with how much you can learn.

Many of you have paid in the vicinity of $120,000 for your SBU education. This is roughly the price of a house. Stop and think about that for a second If you were to buy a house, you would want everything to be perfect.

The same holds in the class room. You deserve the best possible education and to be held to the highest possible standards. For me to ignore the problems that were developing in class last Monday would have been paramount to me saying I don’t care and that you can not do the work.

Yes, my standards are challenging: I ask you to read a great deal; my tests are “not easy”; you have to read journal articles (at least at some level). Why? Because that is what top schools do and that is our competition.

Consider for a moment our text. We use the same text book as classes at many of the top schools in the nations. A list that includes Ohio State, Penn State, Dartmouth, Georgetown, Texas, and NYU to name a few. That is intentional. In the job market we will be held to the same standards as graduates of these fine programs. To hold you to lower standards in class is negligent.

A final thought: a coach/teacher is paid to get more out of the athlete/student than the person could alone. Almost by definition this means that I have to push you harder than you want to be pushed. In the short-run this is not much fun, but in the longer run it pays large dividends.

Ok? Let’s put last week’s class behind us (like a bad loss to a sports team) and take it as a learning experience. Going forward I ask that you work as hard as I know you can. And for my part, I will try to remember that even great teams lose an occasional game :) and this class has the potential to be a great team!



BTW I would like to thank the majority of you who took time to write. I will have more on that in a later post.

Monday's 610 comments

First of all I want to stress that this is not aimed at everyone in the class. Some of you did quite well (11 of 13 was the high) on the quiz and obviously are doing the readings. However it is equally obvious that yesterday's class left a great deal to be desired. From the quiz grades to the complaining, it may have been the first time in 4 years that I actually questioned my decision to teach at SBU and not a more research oriented university.

I will take the blame. Obviously I am not getting the point across to you that you have to do the readings and that it is not a blow off course. 12 of the 13 questions on the quiz were verbatim from the end of chapter ONLINE quizzes for the readings from this week and last. So you had access to all of the questions and answers prior to the quiz! And the performance was still that poor. I presume that the complaining (let us out of class, I do not want to do that much reading, etc) were just venting after a poor quiz, but I would appreciate you make any complaints to me priviately. Complaining in class is a quick way to turn others off to the topic as well.

However, my real concern is the quiz and not the complaints. I have a tough time concluding that you all are really doing the readings. (Well it is either that or that you really are part of a giant sandbag cartel ;) ).

Ok, so we chalk yesterday's class up to being the first time you used the clickers and the Monday after alumni weekend, and several of you were sick, tired, etc. However, what can we do moving forward? I do not want to cause panic, but I do want to warn you again that if the quizzes give you trouble, a test (which is much longer, covers MUCH more material, and has some questions that are more challenging) is going to be a bit more troubling.

I understand that all students want less work, but that is really not fair to those that do know the material to “dumb down” the class. Indeed it is not even fair to those of you who are asking for it. You deserve to be challenged. In the long run you want to be challenged.

Moreover, I am positive that you can all do this. It is not rocket science. You can do it! I mean it. I wish I could convince you of that. When I look out at the class, there are about 10 of you who are sitting with totally blank expressions, not taking notes, just sitting as if you have given up. That is totally the wrong attitude. You can do this! Indeed, many of you have done more than this in Finance 401. Or even Finance 301! And they are undergrad classes. So I know you can do it!

You are all paying a great deal for your MBA. It is my job to make that degree worth something and not just a repeat of what you had in 604 or undergrad classes. Obviously as an graduate course, it has to be more challenging than an undergrad course and as the final finance class this has to be more thorough than a introductory (604) class.

For my part went back and tried to clarify what you have to do for each class. I also want to remind you for the upteenth time that you do not have to read every word of every paper but that you only need to get the top two or three ideas from any paper. For that matter, right now I would be ecstatic if you get the top point from each reading!

Also a note to those of you are banking on "making it by" on the class curve, remember that the curve is not guaranteed. Indeed the syllabus says you need a 90% for an A. So, if I feel that you are not holding up your end of the bargain up--which will be in part evidenced by quiz grades, there will be no curve. You might want to reread that last sentence!

Just in case you think finance is not useful

Ok, so this is really simple, but I figured some of you might be interested...a real life use of finance...

done in Excel using PMT and PV functions.


looking at buying a car…four choices to pay for it

1. $500 rebate
2. 1.9% for 3 years
3. 2.9% for 4 years
4. 3.9% for 5 years

Analysis assumes a 6.22% interest rate is the opportunity cost of capital
this comes from the median rate for a new car, 20% down. (Not quite right, but close)
http://biz.yahoo.com/b/r/a.html

PV
choice 1 500


for all other choices, I assume a 20% downpayment of selling price (about 18,000)
that is borrow 14,400
downpymt of 3,600

choice 2: monthly rate = .019/12, 36 payments


($411.82) Payment
$13,492.84 PV of payments

PV of savings =14440-13,492.84 = 907.16

choice 3

($318.10) Payment
$13,486.73 PV of 48 payments

$913.27 PV of savings

choice 4

($264.55) payment
$13,611.78 PV of 60 payments

$788.22 PV of savings


So assuming the above is correct, it is choice 3...but given at least some positive Transaction Costs and desire to pay it earlier, I would probably recommend choice 2.

Fin 422 required reading on MVE frontier

I just found this. It is from a math professor at McMaster University. The paper is an excellent description of how to create a MVE frontier using Excel.

It may be a bit beyond what you are used to, but if you read it a few times, I am sure you can handle it.

Finance 422-tentative deadlines

ok, here is a preliminary outline for due dates etc. I am sure there are things I have left out but this can be our starting point.

Thursday (2/3/05) –We will also cover Chapter 6 and 7, so not as much time devoted to Index

1. Preliminary “prospectus” criteria for inclusion in index due, name of index, how it differs from other available indices
2. Website space needed—upload prospectus and excel file
   

Next Tuesday (2/8/05)—

1. list of all publicly traded WNY firms due. In class we will make group decision on questionable firms as to whether they meet criteria for inclusion.
2. List of what to include on website as well as how to design the page, ideas, FrontPage?, name etc.

By Thursday 2/10/05:

1. List of newspapers, business publications, radio stations with business shows—might want to keep the same county by county approach
2. Next version of “prospectus” due—should include a discussion of actual computation of the index, firms included, how often it will be updated, where it is available online etc.
3. Preliminary Web site

Tuesday 2/15/05—

1. Complete index—available only to class
2. Addresses and letter to be mailed to publications above
3. preliminary press release to PR dept.

Thursday 2/17/05—

1. Check backed data index to 2000 (further back if possible--but I have doubts)
2. Comparison of index to Business First index, any other local index, S&P, Dow, Nasdaq
3. directions as to how to update the index
4. Press release announcing index to faculty

Thursday 2/24/05—invite Drs. Peterson, Horan, Fischer, Sister Margaret? (OTH?, Buffalo News?) etc to class to show them??? Totally your call on this one. I really do not feel like getting dressed up, but if you want the recognition, we will schedule it.

—final version ready for mailing out to newspapers etc.

What I learned in class....

Research on memory and learning suggests that recall is enhanced by reviewing class material as soon after class as you can. Thus, you may be able to spend 5-10 minutes reviewing class notes right after class, but if you put it off until just before the test, the same recall may require several hours.

From personal experience I would suggest that this works even if it is only mentally. For instance, while going home from class, try to remember a few things that you learned in class (time commitment near zero). I think you will be amazed at how well it works!

Good luck!

Finance 422--from RIch

If you are in 610 you can ignore this.

Yes folks, Rich Miller has found a useful site for our project.


http://rin.buffalo.edu/_asp/econ/econ_coc.asp?county_name=wny

the link is a list of every chamber of commerce in WNY...

can you forward it to everyone in class?

GMAT

IF you still need to take the GMAT, this seems like a great opportunity!

A representative from Kaplan will be offering free practice GRE, GMAT and LSAT exams on the evening of Tuesday, February 15. The GMAT test will begin at 6:00 p.m., the LSAT at 6:15 p.m, and the GRE at 6:30 p.m. Tests will be about three hours in length. Interested individuals must pre-resgister with the Career Center by Friday, February 11.

Connie Whitcomb, DirectorThe Career Center

FInance lab times and location for spring semester

Please let your classes know that I will be available for help in either Finance or Economics on Tuesdays from 7-9pm and on Wednesdays from 6-9pm. I will be in the new S.I.M.M. room that is in the basement of the Reilly Center. It is the old student weight room or room 29. If anyone wants to get in contact with me please give them my email address and/or name.


Thanks,
Adam Babcock

Two CAPM articles of interest for 610

Thought these might help some for our discussion of CAPM. the yare from the April 2004 FinanceProfessor.com newsletter:

I love summary articles. They help make sense of the world and let us see the forest through the trees. Some of my favorites include the Harris and Raviv summary article on capital structure, Fama's paper that responds to Behavioral Finance Theories, and Cliff Smith's introduction to his book of readings in Corporate Finance. And now I have a favorite on the CAPM and other pricing models. While still officially a working paper, Fama and French give us an excellent recap of both current and past work in the field. My favorite line (and totally coincidentally the conclusion): "The CAPM, Like Markowitz' (1952, 1959) portfolio model on which it is built, is nevertheless a theoretical tour de force. We continue to teach the CAPM….but we also warn students that despite its seductive simplicity, the CAPM's empirical problems probably invalidate its use in applications." WOW! Well said. http://gsbwww.uchicago.edu/fac/finance/papers/capm%202004.pdf

Confused about the differing assumptions of pricing models? More than likely you know that the assumptions don't hold very well and you probably know much research has looked at how the assumptions matter. Fama and French now provide a framework to hopefully make sense of some of this confusion. In a working paper they show that investor tastes and expectations matter. For instance, when discussing the CAPM, they conclude that with differing expectations, there is little a priori reason to expect that the market portfolio is the tangency portfolio (and hence the market portfolio may or may not be mean variance efficient, which is a central tenant of CAPM). Additionally the authors use the concept of investor disagreement (and its impact on the market portfolio) to discuss a range of topics ranging from value investing, to stock picking, and mutual fund performance. Very interesting. Not sure how they do it. Great paper after Great paper! http://gsbwww.uchicago.edu/fac/finance/papers/assetprices2004b.pdf

class CD for 610

I had a student ask about the CD that came with text. Is it good? yes!

If you are looking for extra problems etc, I would highly recommend it.

Especially the quizzes that are there. Most of the material is also online, so you can get to it there, but the CD is much faster.

Decision on MBA 610 Revolution book

We are sticking with it. I think it is important enough that we stay with it. I would suggest you try to find it online if the bookstore does not get it.

The Revolution in Corporate Finance ISBN 1-40510-781-2

Amazon has it listed new for $61, used for $40. I owuld also suggest sharing :)

class codes for clickers

Class codes
MBA 610 -01 (monday class)- M8613B914
MBA 610 -02 (thursday class)-N8614B834
MBA 610 (hilbert class)-M8615C688

GO TO EINSTUCTION.COM TO REGISTER

Finance Club Meeting

The first meeting of the SBU Finance Club Meeting will be held
Wednesday night (1/19/05) at 7 pm in the SIMM room in the Reily Center (the old student weight room below the Post Office) to discuss the trip to Chicago.

If you want to go to Chicago but can not attend the meeting please Rich Miller (MILLERRA@sbu.edu) know as soon as possible.

If you are not a member of the club you really should join. It is open to all majors and I think it is one of the best clubs on campus. Just some of the activities we have planned for this semester include:

• the aforementioned Chicago Trip
• a fund raiser for a local boy who has a brain tumor (Tyler)
• working on a web site to teach business/economics/finance to those in the Middle East (largely Syria, Iran, and Iraq)
• a finance tutoring program
• a resume book

Contact Rich for more information:
(MILLERRA@sbu.edu)

CollegeJournal | News & Trends

Good news for those of you graduating with MBA's this year!!

CollegeJournal | News & Trends: "the recruiting climate is improving for M.B.A.s eyeing careers in consulting"

Tsunami relief funds

Well we talk about giving back in some classes, here is a chance.

Red Cross-Red Crescent - Make a donation At some level this is not the correct use of this blog, but on another level if it helps, I am willing to break the rules. This is getting posted on all of my blogs and on the FinanceProfessor.com website itself (later tonight).

After seeing the total destruction caused by the tsunami, I decided to end my week "vacation" from posting and post a link for people to donate. To say the destruction is horrific is an understatement. Money will not make bring back the lives (estimated now at almost 80,000 and maybe 100,000) but may help reduce some of the suffering and even prevent the feared epidemics that the deaths may cause.

CNN has complied a list of aid societies. If you do not want to give to the RedCross/Red Crescent, then pick another. But please give some :)

Additionally at our Allegany Store we will be accepting donations which will be forwarded to the RedCross/RedCrescent Society. Just tell any cashier or stop at the service desk.