Department of Finance, Insurance, and Real Estate

Tuesday and Thursday, 2-3:15 p.m.
Fall 2012

Instructor: Dr. James R. Garven
The Frank S. Groner Memorial Chair of Finance
Professor of Finance and Insurance
Home page:  
Course website:

Office Hours: 3:30-4:30 TTh
or by appointment
Office: HSB 351
Phone: (254) 710-6207

I. Texts and Materials

  1. Integrated Risk Management: Techniques and Strategies for Managing Corporate Risk (required), Neil A. Doherty, McGraw-Hill Professional Publishing, 2000 (henceforth referred to as "Doherty"). You may purchase a paperback version of this book from or an e-book version (which can be read on an iPad, the web, and/or on a Windows PC) from Alternatively, you may also download and print assigned chapters from the course website.

  2. Readings (assigned from sources other than the textbook) distributed from the course website (required).

  3. Wall Street Journal (recommended; in order to qualify for academic (i.e., 75% off) pricing, go to and under "school information", identify yourself as a Baylor student, indicate that you are enrolled in a Finance course, and select "Garven, James R" as your referring professor).

II. Scope and Objectives of Course

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. The course focuses attention on the identification, evaluation, pricing, and management of risk from both personal and corporate perspectives. Topics covered include how to characterize and measure risk attitudes, compare and price risk, evaluate the effects that risk has upon stakeholder incentives and firm value, etc.

III. Grade Determination

The overall course grade is based upon the following formula:

Course Grade = .10(Class Attendance/Participation) + .15(Quizzes) + .15(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 given in class. The date for the first midterm exam is October 4 (in class), and the date for the second midterm exam is November 13 (also in class). The dates for the two midterm exams are subject to change at the discretion of the instructor. However, the final exam date and time is set according to the ocial university schedule.


My office is located at HSB 351 and my telephone number is (254) 710-6207.  I can also be reached by email at the address


This course will be conducted on an informal seminar basis.  Students are expected to attend class regularly and punctually, as well as participate meaningfully in class discussions.


A course blog has been established for Finance 5335. This provides a convenient and timely means for distributing important announcements between class periods. The address for the course blog is, and it is linked from the "Course Blog" button on the home page of the course website.

I recommend that you regularly follow the course blog via any of the following methods:


In business, ethics and integrity are critical components of long-term success. In this class, you are expected to act ethically and take responsibility for your own actions. You should review the Baylor University Honor Code, since this standard will be applied to all of your work.


The course essentially consists of two parts.  Part 1 provides a “primer” on basic economic, statistical and financial principles.  Part 2 builds upon the principles outlined in Part 1 and applies these principles to the study of risk management decision-making by firms.  The textbook material is supplemented throughout the course by various outside readings, all of which are available from readings section of the course website.

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 by date the sequencing of course material for the entire semester.


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