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Department of Finance

Section 1: Tuesday and Thursday, 11 am to 12:15 pm in Foster 316
Section 2: Tuesday and Thursday, 2 to 3:15 pm in Foster 316

Instructor: Dr. James R. Garven
Frank S. Groner Chair of Finance
Professor of Finance and Insurance
Home page:
Course website:
Campus Office: Foster 320.39

 Office Hours: 3:30-4:30 TR,
Or by appointment
Phone: (254) 307-1317

1. Required Texts and Materials

2. Prerequisites

  • The only course prerequisite for Finance 4335 is Finance 3310. However, since Finance 4335 is a quantitatively oriented course, you should also be “up to speed” in mathematics and statistics. The mathematics and statistics topics used in Finance 4335 are listed in the blog posting entitled “Calculus and Probability & Statistics recommendations,” where links to Khan Academy tutorials for each topic are provided.

3. Course Description

  • This course offers an integrated approach to risk management by combining concepts, tools, and techniques from finance and related disciplines such as economics and the decision sciences.
  • Attention is focused on identifying, evaluating, pricing, and managing risk from personal and corporate perspectives.
  • Topics covered include characterizing and measuring risk attitudes, comparing and pricing risk, evaluating risk effects on stakeholder incentives, and designing optimal risk management strategies for individuals and organizations.

4. Learning Objectives

After completing this course, students should understand:

    • The various measures of risk;
    • How to calculate risk measures for individual risk exposures and portfolios of risk exposures;
    • The steps of the risk management process, i.e.,
      • Identify risks;
      • Measure risks;
      • Evaluate different methods for managing risk and
      • Implement an appropriate risk management strategy.
    • Methods that individuals and businesses can use to allocate and manage risk;
    • Factors that limit the extent to which risk can be diversified or traded from one counterparty to another;
    • Various types of insurance and derivative contracts and their use in risk management;
    • Basic financial valuation models and how risk is incorporated into these models; and
    • How risk management affects personal and social welfare and corporate value.

5. Grade Determination

The final course numeric grade is based on the following equation:

Final Course Numeric Grade = .10(Attendance and Participation) + .10(Quizzes) + .20(Problem Sets) + Max{.20(Midterm Exam 1) + .20(Midterm Exam 2) + .20(Final Exam), .20(Midterm Exam 1) + .40(Final Exam), .20(Midterm Exam 2) + .40(Final Exam)}

Since the final exam is comprehensive, this grading scheme allows students to redeem themselves on the final should they perform poorly on either of the midterms.

There will be two midterm exams. The date for the first midterm exam is October 1, and the date for the second midterm exam is October 31. The dates for the two midterm exams are subject to change at the instructor’s discretion. The date and time for the Finance 4335 final exam is set according to the official university calendar.

Final Course Letter Grade. The final course letter grade will be based on the following schedule of final course numeric grades:

A 93-100% C 73-77%
A- 90-93% C- 70-73%
B+ 87-90% D+ 67-70%
B 83-87% D 63-67%
B- 80-83% D- 60-63%
C+ 77-80% F <60%

Since the final exam is comprehensive, this grading scheme allows students to redeem themselves on the final should they perform poorly on either of the midterms.

6. Contact Information

My phone number (which also supports text messaging) is (254) 307-1317. I can also be reached by email at James

7. Attendance and Participation

I expect students to attend class regularly, punctually, and meaningfully participate in class discussions and Q&A. To earn academic credit in Finance 4335, students are required (as per the Hankamer Attendance Policy) to attend at least 75 percent of all scheduled class meetings. If you cannot attend a scheduled class meeting because of illness, then the following steps must be taken to receive an excused absence:

8. Other Course Policies

8. 1. Grade Appeals

If you feel that a graded quiz, problem set, or exam has not been fairly evaluated, then you may submit a grade appeal. In order to be considered, your appeal must be submitted no later than one week after the date of the exam or the due date for the quiz or problem set. Any appeals submitted beyond this deadline will not be considered.

If you decide to submit an appeal, email it to with the following subject header: “Grade Appeal for Finance 4335”. Identify the question(s)/problem(s) that you are appealing, along with a written explanation as to why you think the question(s)/problem(s) merit(s) re-grading. Keep in mind that re-grading implies three possible outcomes: a higher grade, the same grade, or a lower grade.

The above appeal procedure constitutes the “Conference with Faculty Member” requirement outlined in Baylor’s Academic Appeals Policy and Procedure document.

8. 2. Late Work

Problem sets and quizzes are due prior to the start of class on the day on which they are assigned. Problem sets must be in PDF format and uploaded to Canvas (instructions for doing so are available in the document titled “How to scan assignments to PDF and post to Canvas“); paper copies or file formats other than PDF are not accepted. Furthermore, make-ups are not allowed for any missed assignments, except in cases involving medical or family emergencies.

8. 3. Electronics Policies

The following electronics policies will be strictly enforced: 1) laptops may not be used in class without the instructor’s permission, and 2) calling or texting during class meetings is prohibited.

9. Course Blog

Finance 4335 has a course blog located at, which provides a convenient and timely way for me to share important course-related announcements outside the classroom. Every student enrolled in Finance 4335 is provided with an email subscription to

10. Course Schedule

This course provides a primer on basic economic, statistical, and financial principles and applies these principles to the study of risk management decision-making by individuals and organizations. The textbook material is supplemented throughout the course by various outside readings, all available from the course website’s readings section. Although the course schedule is subject to change, the lecture notes page on the course website effectively serves as a course calendar since it lists the sequencing of course material for the entire semester by date.

11. Academic Honesty and Integrity

Plagiarism, or any form of cheating, involves a breach of student-teacher trust. This means that work on quizzes, problem sets, and exams submitted under your name is expected to be your own, neither composed by anyone else as a whole or in part nor handed over to another person for complete or partial revision. Instances of plagiarism or any other act of academic dishonesty will be reported to the Honor Council and may result in failure of the course or expulsion from the University.

Baylor’s honor code and the Finance 4335 honor code are essential resources for understanding various kinds of academic dishonesty. I expect my students to be intimately familiar with both of these documents. The standards outlined in both of these honor codes will be applied to all of your work in Finance 4335.

12. Baylor University Title IX

Baylor University does not discriminate based on sex or gender in any of its education or employment programs and activities, nor tolerate discrimination or harassment based on sex or gender. If you or someone you know would like help related to an experience involving sexual or gender-based harassment, sexual assault, sexual exploitation, stalking, intimate partner violence, or retaliation for reporting one of these types of prohibited conduct, please get in touch with the Title IX Office at (254)710-8454 or report online at

The Title IX office understands the sensitive nature of these situations and can provide information about available on- and off-campus resources, such as counseling and psychological services, medical treatment, academic support, university housing, and other forms of assistance that may be available. Office staff members can also explain your rights and procedural options if you contact the Title IX Office. You will not be required to share your experience. If you or someone you know feels unsafe or may be in imminent danger, please call the Baylor Police Department (254-710-2222) or the Waco Police Department (9-1-1) immediately. For more information on the Title IX Office, the Sexual and Gender-Based Harassment and Interpersonal Violence Policy, reporting, and resources available, please visit