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Summary Finance 1 Erasmus
Need a thorough summary for your Finance exam? Don't look any further. With this summary the exam will be a piece of cake!
“
“Studying
for finance 1 in the weekend. Definitely
not looking forward to this. There’s just too much to learn, not only for this
course. I will never make it.”
Does this line of thought seem familiar? If so, you’re in luck. Because Reken Maar Verslagen has the solution for you.
The course Finance (FEB12003X) has the reputation of being one of the hardest courses in the International Bachelor Economics and Business Economics (IBEB). Maybe you’ve already experienced this yourself. Subjects like the Hirshleifer model, Net Present Value (NPV), Modern Portfolio theory and the valuation for stocks and bonds are examples of subjects that student usually struggle with. With the summary from Reken Maar Verslagen you can get to work immediately and make sure you pass the course with the best grade possible. Below you can find some crucial inside information on the course to help you prepare.
It’s really important to know that you can use a cheat sheet on your Finance exam. This means you can take your own tiny summary finance with you to the exam. Try to maximize the use of this cheat sheet by focusing on the subjects you struggle with the most. The best time to prepare this is the day before the exam when you’re done studying. Luckily we did the hard work for you and made a complete summary Finance that perfectly fits the Erasmus University bachelor. Using the summary finance erasmus Rotterdam will ensure that you keep some free time while still getting the best grade possible.
Summary Finance for the basic concepts
The finance summary, which you can order here, uses examples to explain the basic concepts of the course Finance. A lot of these concepts might seem familiar from other courses like micro-economics or accounting.
In this article we will run you through the following core concepts of the finance course. These concepts provide a good basis for the final exam and can help you a lot if you know them well.
· Core concept 1: Legal Forms
· Core concept 2: Financial Ratios
· Core concept 3: Hirschleifer Model
· Core concept 4: Investment Decisions (Net Present Value)
· Core concept 5: Portfolio theory
We will go through these concepts below.
Summary Finance for the basic concepts
The finance summary, which you can order here, uses examples to explain the basic concepts of the course Finance. A lot of these concepts might seem familiar from other courses like micro-economics or accounting.
In this article we will run you through the following core concepts of the finance course. These concepts provide a good basis for the final exam and can help you a lot if you know them well.
· Core concept 1: Legal Forms
· Core concept 2: Financial Ratios
· Core concept 3: Hirschleifer Model
· Core concept 4: Investment Decisions (Net Present Value)
· Core concept 5: Portfolio theory
We will go through these concepts below.
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Summary Finance Erasmus Rotterdam – Core Concept 1: Legal Forms
Firstly, the summary explains different legal forms like a sole proprietorship, General or commercial partnership, Professional or public partnership, Limited Partnership, Private Limited Company and a Public Limited Company. Who is legally accountable in every legal form? Which legal forms have a chance to create an agent principal problem? What function does the Supervisory Board have? Who are usually in the Board of Directors? What will usually be discussed during an annual general meeting (AGM)? Answers to these questions and more can be found in the Summary Finance for Erasmus Rotterdam by Rekenmaar Verslagen!
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Summary Finance Erasmus Rotterdam – Core concept 2: Financial Ratios
Another crucial part of the summary finance are the financial ratios. These are important for analyzing the financial situation of a company, something you’re going to learn during the course Finance at the Erasmus in Rotterdam. The most important financial ratios and calculations are the following:
· Market Value Equity
· PPS (Profit per Share)
· Retained Earnings
· Operating Margin
· Current Ratio
· Net Profit Margin
· Quick Ratio
· Cash Ratio
· Interest Coverage Ratio
· Debt/Equity Ratio
· ROE (Return on Equity)
· ROA (Return on Assets)
To pass your exam it’s very important to practice a lot with these ratios and to properly understand what the stand for and tell about the financial situation of a company. All ratios are explained in depth in our summary Finance Erasmus Rotterdam. There are also example questions available where you are explained step by step how to answer similar questions. Can’t wait to start practicing? Buy your summary Finance here!
Summary Finance Erasmus Rotterdam – Core concept 3: Hirschleifer Model
One of the first subjects you will come to know in the Finance course is the Hirschleifer model. Usually, 2 exam questions will be about this model. Therefore it is a very important model to know. If you practice well enough the model should be easy to understand and the exam questions will become free points.
The Hirschleifer model contains many assumptions, all of which you can find in the summary Finance Erasmus Rotterdam. It also contains numerous mnemonics or study aids to put on your cheat sheet to help you remember. We advise you do this as these can be very helpful.
Time for a practice question! Grab some pen, paper and your calculator and follow along! A question you might come across on the exam is as follows:
Assume a world according to the Hirshleifer model. The income of Danny at t = 0 and t = 1 (CF0 and CF1) is €50.000 and €51.000 respectively. At t = 0 Danny consumes €45.000. The investment at t = 0 (EA) is equal to €15.000 and yields €25.000 (OF) at t = 1. The risk-free interest rate is 2,00%.
Which of the following statements is true?
a. At t = 0 Danny lends an amount of €10.000.
b. At t = 0 Danny borrows an amount of €10.000.
c. At t = 0 Danny lends an amount of €5.000.
d. At t = 0 Danny borrows an amount of €5.000.
The answer to this old exam question is B. Do you want to know how we got this answer or do you want to practice more with the Hirshleifer model? Buy the complete summary Finance Erasmus Rotterdam through this link.
Summary Finance Erasmus Rotterdam – Core concept 4: Investment Decision (NPV)
Another topic that will be touched on during the lectures in Rotterdam is the Investment Decision. During this, questions will be brought up like:
· Is the investment attractive?
· How do we choose between investments?
· How do we choose if we have a limited budget?
To answer these questions we will have to learn to understand and analyze cashflows of companies. With this, it is important to understand that money in the future is less important than money in the present due to interest. Thus, the cashflows in the future have to be discounted to the present using that interest rate.
To see whether an investment is valuable we use the NPV-rule (Net Present Value). When the net present value of an investment is bigger than 0, it is profitable to invest. This is also the answer to the first questions asked above. Do you want to know the answers to the other questions or do you want to practice using the net present value rule? Buy the summary Finance Erasmus Rotterdam here and become a professional on this subject of the Finance course!
Summary Finance Erasmus Rotterdam – Core concept 5: The Portfolio Theory
The last subject of the summary Finance Erasmus Rotterdam which we will shine a light on in this article is the Portfolio Theory. This theory suggests that within Finance, each and every investor, based on his utility function, invests based on their so called efficient portfolio. The individual makes their choice based on his own utility function, a term you might remember from the micro-economics course. The corresponding assumptions of this theory are mentioned in the complete summary. These are crucial to know by heart or to have written on your cheat sheet.
The most important lesson you will learn from the portfolio theory is the importance of diversifying your portfolio, something you might have heard if you are familiar with the stock market. There will be questions on the exam about the general theory of the portfolio theory, some of which will look very similar to each other. So make sure you practice properly with the practice questions in the summary so you know what to expect.
Summary Finance Erasmus Rotterdam: Structure of the Exam
The Finance exam at the Erasmus School of Economics has had the same structure for years now. It consists of 30 multiple choice questions. Each subject has a set number of questions, which are repeated every year. There will be questions about the following subjects on the exam. Number of questions for each subject are in between the brackets:
- Hirshleifer model (2)
- Financial concepts (2)
- Investment decision rules (3)
- Capital budgeting (1)
- Valuation of stock and bonds (2+2)
- Portfolio theory (2)
- CAPM-Model (2)
- APT (2)
- Performance measurements and EMH (1+2)
- Company cost of capital (7, divided in the NPV, perfect market and corporate/personal tax)
- Dividend Policy (2)
Summary Finance Erasmus Rotterdam, everything you need to pass
As you have read, a lot of subjects are discussed in the Finance course. Therefore, it is very important to know the theories well and practice a lot with old exam questions.
The summary from Reken Maar offers a helping hand. Previously mentioned subjects and all other subjects of the course are clearly explained using examples and practice questions. Buy your summary here. We at Reken Maar wish you all the best with the preparations and the best of luck with your exam!
Interested in Finance?
What jobs can you get?
Finance is a term that entails a lot of subjects. Therefore the EUR
splits finance in a few categories. These are fore example:
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Personal Finance
·
Corporate Finance
·
Sustainable Finance
·
Public Finance
·
Financial management
You can imagine that there is a lot to learn if you want to specialize in
finance. During the IBEB at the Erasmus School of Economics (ESE) the finance
courses will serve as an introduction to the vast world of finance. You will
learn a lot of basic theories to help you prepare for further studies or future
careers involving finance. Some of these are:
·
Assistant Financial Controller
·
Financial Employee
·
Accountant
·
Financial Administrator
·
Finance & Control Employee
·
Financial Manager
·
Financial Director (CFO)
·
Business Controller
·
Financial Controller
·
Accounting Employee
Learning a lot of theories will be very time consuming, not only during lectures. We at Reken Maar are very familiar with the course and therefore we have knowledge about everything and anything you need to know to pass this course, all of which can be found in our Summary Finance specifically for students the course Finance at the Erasmus University Rotterdam.
- We at Reken Maar wish you all the best with the preperations and the best of luck with your exam!
