SDST3904 Corporate finance for actuarial science (6 credits) Academic Year 2025
Offering Department SCDS (Department of Statistics and Actuarial Science) Quota ---
Course Co-ordinator Dr D Lee, SCDS (Department of Statistics and Actuarial Science) < leedav@hku.hk >
Teachers Involved (Dr D Lee,Statistics & Actuarial Science)
Course Objectives This course is designed for actuarial science students to receive finance component of VEE Accounting and Finance from the Society of Actuaries. The objective of this course is to introduce students to the fundamental principles of corporate finance. The course will provide students with a systematic framework within which to evaluate investment and financing decisions for corporations.
Course Contents & Topics The first part of the course will give an introduction to corporate finance and provide an overview of some topics covered in SDST2902 and SDST3615. These include financial markets and companies, time value of money, and measures and performance assessment of financial performance. The main part of the course will focus on some important topics of corporate finance including: portfolio theory, utility theory, Markowitz mean-variance analysis, capital asset pricing model, weighted average cost of capital, market efficiency and behavioural finance, capital structure and dividend policy, financial leverage and firm value.
Course Learning Outcomes
On successful completion of this course, students should be able to:

CLO 1 describe the tasks of a financial manager and the financial decisions made by a corporation
CLO 2 recall the use of present and future values in calculating the value of bonds and stocks
CLO 3 assess financial performance using various investment criteria and techniques of project analysis
CLO 4 analyze the mean-variance portfolio theory, capital asset pricing model and arbitrage pricing theory
CLO 5 identify the factors to be considered by a company when deciding on its capital structure and dividend policy, and also the impact of financial leverage and long/short term financing policies on capital structure
CLO 6 describe the various forms of market efficiency, and explain investor behaviour using behavioural finance theories
CLO 7 explain the core features of the utility theory
Pre-requisites
(and Co-requisites and
Impermissible combinations)		 [(Pass in ACCT1101 and SDST2902) or (Pass in SDST3615)]; and
Not for students who have passed in FINA1310, or have already enrolled in this course.
Only for students admitted in 2025 and thereafter.
Course Status with Related Major/Minor /Professional Core 2U000C00 Course not offered under any Major/Minor/Professional core
2024 BSc in Actuarial Science ( Core/Compulsory )
2024 Minor in Actuarial Studies ( Disciplinary Elective )
2023 BSc in Actuarial Science ( Core/Compulsory )
2023 Minor in Actuarial Studies ( Disciplinary Elective )
2022 BSc in Actuarial Science ( Core/Compulsory )
2022 Minor in Actuarial Studies ( Disciplinary Elective )
2021 BSc in Actuarial Science ( Core/Compulsory )
2021 Minor in Actuarial Studies ( Disciplinary Elective )
Course to PLO Mapping 2024 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2023 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2022 BSc in Actuarial Science < PLO 1,2,3,4,5 >
2021 BSc in Actuarial Science < PLO 1,2,3,4,5 >
Offer in 2025 - 2026 Y        1st sem    Examination Dec     
Offer in 2026 - 2027 Y
Course Grade A+ to F
Grade Descriptors
A Demonstrate thorough mastery at an advanced level of extensive knowledge and skills required for attaining all the course learning outcomes. Show strong analytical and critical abilities and logical thinking, with evidence of original thought, and ability to apply knowledge to a wide range of complex, familiar and unfamiliar situations. Apply highly effective organizational and presentational skills.
B Demonstrate substantial command of a broad range of knowledge and skills required for attaining at least most of the course learning outcomes. Show evidence of analytical and critical abilities and logical thinking, and ability to apply knowledge to familiar and some unfamiliar situations. Apply effective organizational and presentational skills.
C Demonstrate general but incomplete command of knowledge and skills required for attaining most of the course learning outcomes. Show evidence of some analytical and critical abilities and logical thinking, and ability to apply knowledge to most familiar situations. Apply moderately effective organizational and presentational skills.
D Demonstrate partial but limited command of knowledge and skills required for attaining some of the course learning outcomes. Show evidence of some coherent and logical thinking, but with limited analytical and critical abilities. Show limited ability to apply knowledge to solve problems. Apply limited or barely effective organizational and presentational skills.
Fail Demonstrate little or no evidence of command of knowledge and skills required for attaining the course learning outcomes. Lack of analytical and critical abilities, logical and coherent thinking. Show very little or no ability to apply knowledge to solve problems. Organization and presentational skills are minimally effective or ineffective.
Communication-intensive Course N
Course Type Lecture-based course
Course Teaching
& Learning Activities
Activities Details No. of Hours
Lectures 36.0
Tutorials 12.0
Reading / Self study 100.0
Assessment Methods
and Weighting
Methods Details Weighting in final
course grade (%)		 Assessment Methods
to CLO Mapping
Assignments Coursework (assignments, tutorials, and a class test) 25.0 1,2,3,4,5,6,7
Examination One 3-hour written examination 75.0 1,2,3,4,5,6,7
Required/recommended reading
and online materials		 Brealey, R.A., Myers, S.C., Allen, F.: Principles of Corporate Finance (McGraw-Hill, 2020, 13th edition)
Berk, J., DeMarzo, P.: Corporate Finance (Pearson, 2020, 5th edition)
Course Website http://moodle.hku.hk
Additional Course Information NIL