Journal of
Financial Education

Volume 37                                               CONTENTS                                      Fall/Winter 2011


Faculty Perceptions of and Attitudes Towards the CFA Designation

Kevin Bracker and Connie Shum

This paper provides the results and analysis of a survey of 764 Finance faculty (with 211 responses) addressing their perceptions and attitudes towards the CFA designation. We find that faculty see significant value in the CFA designation for both faculty and students within the field of Finance. Faculty members who are CFA charterholders and those enrolled in the program feel that it has helped both research and teaching efforts. There is also recognition among faculty that participation in the CFA Program is becoming more important for students seeking careers in investments-related fields. There is also evidence that faculty participation in the CFA Program is diminished due to the extensive time demands and lack of recognition with respect to hiring, promotion and tenure.

Pages 1-44


Online Versus In-class Teaching: Learning Levels Explain Student Performance

Richard J. Fendler, Craig Ruff and Milind Shrikhande

Several earlier studies in the pedagogical literature have reached widely diverging conclusions regarding the efficacy of online versus in-class instruction. These studies have taken an aggregate view of these two instruction settings. We enter the debate developing a perspective based on different learning levels. In this paper, we examine student performance in the online and in-class instruction settings at different learning levels as classified in Bloom’s taxonomy and conclude that learning outcomes are different in these two settings primarily because they are different at the higher learning levels. We find that the inclusion of learning levels clears the picture greatly and opens avenues for the scholarship of teaching and learning along paths untrodden by any previous researchers.

Pages 45-63


Market Microstructure: An Interactive Exercise

Jeff Donaldson and Donald Flagg

One of the challenges in teaching market microstructure is getting the students to understand the intricacies of each market participant involved in establishing intraday stock prices. Although a lecture on microstructure serves to initiate the inspiration of students, we find that having students perform an interactive exercise which involves playing the role of various market participants provides a foundation for explaining bid/ask spread, market participants’ behaviors, and how stocks prices change throughout a day of trading.

Pages 64-81

Experiential Learning and Finance: A Hands-on-Approach to Financial Modeling

Janet D. Payne and Glenn Tanner

This paper proposes that business schools should include a financial technology course in the undergraduate finance curriculum. In the past decade, increases in the availability and affordability of financial data and technology have transformed the way business is done. As a result, graduates with a higher competency in technology applications will have a significant advantage in career placement and future success. Business schools, however, have been slow to adapt to this transformation. Though many finance courses incorporate spreadsheet analysis in content courses, we find that fewer than 1% of AACSB-accredited business schools offer a dedicated course in financial technology applications. We survey the methods used by these courses, describe the content of one such course, and offer an example of an assignment used in our financial technology course.

Pages 82-100

A Course Project Applying Students’ Business Skills to Non-Profit Organizations

Gerard T. Olson

With a growing emphasis being placed by firms on socially responsible activities in reaction to widely publicized corporate scandals, it becomes imperative for business curriculums to help students learn how to apply their business skills to help others. The purpose of this paper is to describe a course project that has students apply their business skills by working with a non-profit organization. In addition to applying concepts discussed in class to a real-world situation, the project integrates several other learning goals such as developing problem solving skills, working with groups, written communi-cation skills, and oral communication skills. Students develop plans that relax a non-profit organization’s cash flow and financial constraints thus enhancing its ability to provide services to its constituencies. The course project enables students to provide public service to the community. More importantly, students are given skills to replicate their service to other non-profit organizations after graduation. The course project can be readily applied to finance and other business courses.

Pages 101-111


REIT Valuation: The Case of Duke Realty Corporation

James Stotler

This case will require the student to value the equity of Duke Realty Corporation, (NYSE: DRE) and make a buy or sell recommendation as an independent analyst. The data given should be examined to determine whether or not the company’s stock is valued above or below the market price in order for investors to make a buy or sell decision. The student must assess the real estate industry environment using Porter’s five-force model of competitive strategy and the DuPont identity. Valuation techniques employed include the capital asset pricing model, the two-stage dividend-discount model, the P/E valuation approach, and the Gordon model.  The student is placed in the role of an equity analyst and asked to prepare a buy or sell recommendation for Duke Realty Corporation (NYSE: DRE) stock. DRE is a large office and industrial property owner and manager operating in the midwest and southeast.

Pages 112-117

Municipal Variable Rate Debt After the Credit Crisis: Northeastern University’s $65 Million Question

Wesley Marple

On January 12, 2009 Jack McCarthy, Northeastern’s Senior Vice President for Administration and Finance, and Sam Solomon, Treasurer and Director of Finance, were evaluating three alternatives for raising approximately $65 million. Of this amount, approximately $26 million would be used to complete the process of refinancing previously issued Auction Rate Securities (ARS), with the balance dedicated to financing the renovation of three multi-function classroom buildings, constructing a new dormitory and renovating the school’s primary sports arena. Their recommendation would be presented in one week’s time to the University’s trustees.

Pages 118-143