Current core courses

C3. Corporate Finance: This MBA course covers the principal decisions in corporate finance – working capital management, investment and financing decisions, mergers and acquisitions, capital structure, dividend policy and risk management. I regularly teach this course in our on-campus long duration and online/blended learning programs.

C2. Asset Pricing: This PhD course introduces the theory of financial economics and the language of modern asset pricing in discrete time. The course adopts the state price and stochastic discount factor approaches to asset pricing based on expected utility theory. Within this framework, the course covers the classical mean variance models including the CAPM and APT as well as the inter-temporal consumption based asset pricing model. The entire course is based on a discrete time and mostly discrete state space setting, with a focus on equity markets. The course ends with a survey of stylized facts and issues in empirical asset pricing.

C1. Financial Markets: This MBA course introduces finance theory and describes economics of bond, equity, FX and derivatives markets. This compulsory course forms the foundation for all subsequent finance courses. I regularly teach this course in our on-campus long duration and online/blended learning programs.

Current elective courses

E6. International Financial Markets: This MBA course is designed to introduce the students to practicalities and language of international financial markets, including equity, bonds, oil and foreign exchange markets. The course builds on the basics developed in the foundation finance courses of the MBA program at IIMA (or equivalent) and studies their application from the point of view of investments and financing in international financial markets. The topics covered include i) international equity markets and portfolio diversification, ii) international bond financing, iii) international crude oil markets, and iv) foreign exchange markets and currency derivatives. This is a new course with its first offering in the coming academic year in 2023.

E5. Economics of Financial Crises: This PhD course is designed to introduce the students to select literature on the economics of financial crisis. Given the breadth of research on the subject, a short course like this has to make a choice between surveying all major strands of the relevant literature or choosing to focus on a few of them. This course takes the latter view and restricts the scope of the couse to discussing influential theoretical papers on i) bank runs and liquidity crises, and ii) the economics of securitization, funding liquidity and credit freezes, particularly in the context of the Global Financial Crisis of 2008. This is a new course with its first offering in the coming academic year in 2023.

E4. Foundations of Finance: This MBA course is designed to introduce the theoretical foundations underlying some of the main conceptual ideas introduced in basic finance courses of MBA programs. The course is designed for students interested in understanding the economic foundations of finance, the elements which are usually skipped in introductory finance courses, and/or looking to recap main ideas in finance with some added depth. In particular, the course covers the microeconomics of risk and risk aversion, origins of the Capital Asset Pricing Model, classical theories underlying capital structure and dividend policy, and risk management. This course was started in 2022.

E3. Strategic Corporate Finance: This MBA course is designed to introduce strategic corporate finance issues that Chief Financial Officers have to deal with in a variety of corporations ranging from mature organizations to newly listed firms to unicorns. Building upon the basics covered in the core PGPX corporate finance course, this elective brings to fore the role of the CFO in dealing with complex situations like managing portfolios of businesses and strategic acquisitions, arranging financing from capital providers, dealing and communicating with different stakeholders, including the Board of Directors and large investors, and setting policies to ward off against volatile financial and business environments as well as corporate governance crises. The emphasis would be on discussing situations where decision making requires both the CFO and the CEO to work closely together to ensure coherence between financial and business strategy. This course is with Jayanth R. Varma and was started in 2022.

E2. Black Swans and Gray Rhinos: Made popular by Nicholas Nassim Taleb, “black swans” has long been used as a metaphor in financial markets for rare and almost impossible-to-predict large shocks. Noticing that often many crisis are a result of ignoring the obvious, Michel Wucker coined the “gray rhinos” metaphor to capture that many large problems are often well in sight but not identified as one at the time (rhinos are often described as either black or white, but they are all really gray). The purpose of this MBA elective is to understand the variety of black swan and gray rhino events leading up to financial crises through the lens of historical episodes and study the strategic issues that arise in navigating them through different business situations. The cases covered in the course discuss the impact of different kinds of crises on acquisitions, debt restructuring, financial flexibility and portfolio management decisions. This course is with Jayanth R. Varma, and regularly offered since 2020.

E1. Fixed Income Securities: This MBA elective is designed to provide theoretical and practical understanding of fixed income securities, credit risk, and securitization both from the perspective of an investment manager or financial intermediary and from the perspective of an issuer of these securities. There is only very minimal coverage of fixed income derivatives and credit derivatives. This course is with Jayanth R. Varma, and regularly offered since 2014.

Old or one-off courses, in descending order of their last offering

O12. Financial Risk Management: This MBA course was designed to study the role and elements of risk management in financial institutions. After studying the environment in which commercial banks, investment firms and hedge funds operate in, and the need for a dedicated risk management function in large financial institutions, the course separately discussed the practical and regulatory issues that arise in managing different kinds of risks, in particular, market risk, credit risk, model risk and operational risk. The focus was on the organization of the risk management function and the evolving regulatory landscape after the global financial crisis. The was a one-off course offered jointly with Saee Joshi (a PGP alumnus) in 2022.

O11. Seminar Course in Derivatives Markets: This PhD course was designed to introduce literature on markets for exchange-traded derivatives and economics of derivatives clearing. Beginning with a recap of basics of derivatives and introduction to the economics of no-arbitrage and the Black-Scholes model, the first half of the course studies select influential papers highlighting characteristics of markets for financial futures, commodity contracts and options and their valuation. After the 2008 Global Financial Crisis regulators worldwide have been pushing for increasing role of central counterparty clearing houses (CCPs) in clearing of over-the-counter derivatives. The second half of the course studies the economics of derivatives clearing, and implications of increasing role of CCPs for systemic risk. The was a one-off course offered in 2020.

O10. Strategic Risk Management: This MBA course was designed to introduce issues in managing financial risks in a large non-financial corporation. The focus was on strategic risks emanating from fluctuations in commodity prices, foreign exchange rates and interest rates. This was the first course properly case-based course I was involved in, and was responsible for getting me into corporate finance. This course was offered every year from 2016 to 2019 with Jayanth R. Varma. This eventually led to our related current offering, Strategic Corporate Finance.

O9. Derivatives Pricing: This PhD course was designed to provide an introduction to the theory of derivatives pricing models in continuous-time. Beginning with a review of relevant prerequisites, the course first built the intuition of necessary concepts using discrete time models before moving to derivatives pricing in continuous time using the Black-Scholes model. The second-half of the course introduced select advanced topics including models of jump-diffusion, fixed-income securities and stochastic volatility. The course used a mix of readings from textbooks, review papers and select classic papers from the field of derivatives pricing. This course was offered every year from 2013 to 2019.

O8. Foundations of Finance: This is a compulsory course for PhD students in Finance, and it introduces essentials of utility theory, financial economics and mathematical preliminaries for asset pricing and corporate finance. The course is divided into four parts. The first part covers microeconomics of asset pricing and builds basics of expected utility theory and risk aversion. The second part reviews main results from mathematics of vector spaces and random variables. The third part covers portfolio theory, separation theorems and static CAPM. The fourth and the final part introduces economics of information asymmetry, signaling and agency theory to build foundations for corporate finance. I taught this course in 2018 and 2019.

O7. Structured Products: This course was designed to introduce a variety of structured products sold by market makers in equity, foreign exchange and fixed income markets. Using real world term-sheets, the course discussed products ranging from simple barrier options to complex structured notes. The focus was be on the business logic behind popular structures, and issues involved in designing and pricing such products. This course assumed a basic knowledge of derivatives. This course was offered every year from 2016 to 2018 with Jayanth R. Varma.

O6. Analytics of Financial Risk Management: This MBA course was designed to provide a brief introduction to the mathematical theory of risk measures and their applications in financial risk management. In particular, the course covered the following topics: i) idea of risk factors and loss distributions, ii) standard methods for market risk measurement, iii) convex and coherent risk measures, iv) extremal risk measures, and v) Bayesian approach to risk management. This course was offered twice, in 2014 and 2015.

O5. Monetary Theory and Policy: This MBA course was designed to provide students a framework to understand the debates surrounding the theory and practice of monetary policy today. After reviewing the IS/LM, AD/AS framework introduced in MEP, the course starts off with the instrument problem facing a central bank and goes on to consider the “rules vs. discretion” debate. Next we look at the transmission channels through which monetary policy works and study the usefulness of Taylor rules in practice. After looking at the linkages of monetary policy with the fixed-income market and the role of quantitative easing in financial crisis, the course ends with a discussion of “inflation targeting” as a framework for monetary policy. This course was jointly with Errol D’Souza, and I last taught this course in 2016.

O4. Pricing and Hedging Derivative Securities: This course was designed to introduce methods for pricing derivative securities in practice. It builds up the necessary toolkit for understanding pricing and hedging of equity/FX derivatives using the Black-Scholes model. The course also introduces popular plain vanilla and structured prod- ucts in the equity/FX markets, and discusses practical difficulties associated with hedging using the Black-Scholes model. While the course no doubt has a mathematical bent, for most of the concepts the math required is limited to having a working knowledge of calculus, Taylor series, and basic probability theory. The emphasis of this course is on providing the toolkit and its applications. This was the first elective course I designed and offered, so it remains special to me. I last taught this course in 2015.

O3. Computational Finance: This MBA course was designed to introduces numerical methods for pricing derivative securities in practice. The focus of the course was on the use of Monte Carlo and Finite Difference methods for pricing equity and foreign exchange derivatives. The course ended with a discussion of ‘volatility smile’ and the use of stochastic volatility models in practice. This course was offered once in 2013 with Jayanth R. Varma. A version of this course was also taught at DAIICT, Gandhinagar in 2016.

O2. Time Series Analysis: This PhD course was designed to introduce the theory and methods of time series analysis for research in economics and finance. The objective of the course was two-fold. First is to give participants enough technical background to enable them to read research papers in applied time series analysis. The second was to introduce select advanced topics useful for analysis of macroeconomic and financial time series. After introducing fundamental concepts in time series analysis, the course covers the theory of stationary ARMA processes and reviews the relevant asymptotic distribution theory. This forms the bulk of roughly half the course and forms the basis for studying Vector Autoregressions (VARs) which is discussed next. Moving on from considering covariance stationary processes, the course next introduces the econometrics of unit roots. The core of the remaining portion consists of studying linear combinations of unit root processes, i.e. Cointegrated Systems (VECMs), and models with conditional heteroskedasticity (GARCH). We end the course by introducing State Space representations of time series models and Bayesian methods. This was the first PhD course I designed, and I offered alone for a couple years and then with Apratim Guha. I last taught this course in 2014.

O1. Macroeconomics and Economic Policy: Why do some countries grow at a faster rate than others? Why are there inflation, unemployment and recessions? What are the sources of these aggregate economic fluctuations? Can the government policymakers do something about them? Should they? This course provides a framework to start thinking about these questions. It introduces students to the definition and measurement of aggregate variables such as income and expenditure, inflation and unemployment, and then develop a conceptual framework that provides insights into the determinants of these aggregate measures that macroeconomics concerns itself with. The course will also include an analysis of the role of government and central bank with reference to monetary, fiscal and foreign exchange rate policies. This is a core course in our MBA programs, and I taught this course to PGPs in 2012 and 2013.