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Finance: Curriculum
Finance students take courses from both the Katz Graduate School of Business and the Department of Economics as part of their training. The finance faculty offers seminars that provide the core of the doctoral students’ training. These seminars introduce the theoretical underpinnings of finance. Beyond these seminars, students are expected to take additional finance seminars that focus on their chosen areas of interest. Since strong methodological skills are critical to a successful scholarly career, finance doctoral students typically also take courses in econometrics, statistics, and mathematical methods. Students are free to matriculate into courses within the Katz school, other colleges at the University of Pittsburgh (such as Statistics or Mathematics), or at Carnegie Mellon University.
A minimum of eight major and seven methodology related courses are necessary to fulfill coursework requirements. Students typically pursue four courses per semester for two years prior to taking their comprehensive exams in late summer following their second year. The finance seminars that are consistently offered by Katz faculty are shown below:
- Finance Theory 1: This seminar provides the theoretical foundation for the fundamental paradigms in asset pricing. Topics covered include portfolio theory, the capital asset pricing model, arbitrage pricing theory, the consumption capital asset pricing model and contingent claim pricing.
- Finance Theory 2: This seminar provides the theoretical foundation for the fundamental paradigms in corporate finance. Topics covered include the theory of the firm, capital structure, and dividend policy.
- Empirical Methods in Finance: This course will introduce students to many of the empirical methods used in modern financial economics. The course focuses on the empirical techniques used most often in the analysis of financial markets and how they are applied to actual market data. The list of topics includes: a) statistical properties of asset returns and the efficient markets hypothesis, b) empirical tests of asset pricing models (CAPM, APT, Intertemporal CAPM, Consumption CAPM), c) tests of conditional asset pricing models, d) event studies, e) Panel Data f) other topics time permitting. Students are strongly advised to attend the introductory class at the beginning of the semester in order to decide on taking the class for credit. Statistical software proficiency is required.
- Empirical Research in Finance: The course covers a wide range of topics in finance. The purpose of the course is: (1) To introduce students to various empirical methodologies in corporate finance; (2) Understand the current state of empirical findings on some of the main topics in finance; (3) Understand the main data sources for empirical corporate finance; (4) Help students find interesting topics for research.
- International Finance: This course examines empirical corporate finance in the areas of equity and debt financing, capital structure, and financial intermediaries in the primary capital market. International aspects of a number of topics are covered. The course uses a mix of influential papers and recent papers in each area. Students will present papers, write referee reports, and complete a term project.
- Market Microstructure: This seminar provides an introduction to theoretical and empirical studies on the impact of the structure and organization of markets on the price formation and quote process.
- Corporate Governance:
- Interaction of Finance and Industrial Organization: The objective of this course is to provide students with exposure to an area of research that encompasses elements of both industrial organization (IO) and corporate finance. Most of the papers discussed examine the interaction between a firm’s real decisions (historically the purview of IO) and a firm’s financial decisions (historically the purview of financial economists). A few topics of related interest round out the course.
- Seminar Series in Finance: This course accompanies the finance seminar series. The papers that are to be presented in the seminars serve as the focus of this course. Prior to scheduled seminars, students read and meet to discuss the papers to be presented at the seminar as well as several important, related papers. Class meetings are scheduled around the seminar schedule. Students prepare “referee reports” for the seminar papers and these reports are compiled and shared with the seminar speakers.
The courses that students often take outside of Katz are shown below:
- Advanced Microeconomic Theory 1, 2
- Introduction to Econometric Theory
- General Econometrics
- Advanced Econometrics 1, 2
- Mathematics of Finance 1, 2, and 3
Second Year Paper:
Students are required to complete an independent research proposal/paper and submit it to the finance faculty at the end of the spring in their second year of study. It is anticipated that this proposal will eventually develop into a publishable research article; however, the main goal of the assignment is for students to gain experience in identifying important research questions and carrying out theoretical and empirical investigation of these questions.
Dissertation:
Finance students' dissertations typically consist of three essays addressing important issues in financial economics. These essays are often subsequently submitted as separate papers to major journals.