BBA Finance [PID 30]

The Finance curriculum provides a theoretical framework of the environment in which financial institutions operate. Individual courses deal with financial institutions, the financial management of business firms, investments, and particular areas of banking, real estate, and insurance. Emphasis is on the decision making, or analytical aspects of the subject areas.

The department offers three degree options. Option I (General Finance) provides training in business finance, financial decision making within the firm, and the financial and banking systems. Option II (Real Estate) provides a broad background in real estate analysis, investment, and financial decision making. Option III (Insurance) provides a background in finance with emphasis on insurance and risk management. Minors are offered in General Finance and Real Estate.

Kenneth Galchus

kegalchus@ualr.edu
(501)569-8872

Demonstrate understanding of the ethical issues involved in finance. In particular, the student should be exposed to agency theory and its implications for financial managers. This includes exposure to fiduciary issues.

For the last few years, the finance major has been assessed by administering an objective test in the capstone Advanced Financial Management (Finc 4395) class. Although the test has been revised periodically over the last several semesters, the basic nature of the examination has remained the same. The test is required of all students in the class, and they are informed of the importance of doing well on it.

In developing this test, the finance faculty realized that it was first important to define a ‘common body’ of knowledge in the finance area that students should know upon receiving their finance degrees from UALR. This in turn led to a ‘Concept Grid’ which contains a list of the specific concepts that the faculty felt that finance majors should know upon getting their degrees. The concepts are listed down the left side of the matrix. The finance courses containing the concepts are listed across the top of the matrix. Within the matrix we have subjectively assigned a number from 1 to 3 that indicates the extent to which the concept is covered in a specific class. The assessment test is designed to see to what extent finance majors have learned these concepts. The test is available from the department.

This test has worked well so far in assessing the finance program, and, thus, there is no need to revise this methodology. However, the test was revised in spring, 2004 in light of comments made at a meeting where we shared our results with our stakeholders. This is discussed below.

The following table shows the results of giving the assessment test in Finc 4395 (Advanced Financial Management) for the past several years. Finc 4395 is a capstone course which finance students take in their senior year.

The first column in the table (#) shows the number of students who took the test while the second column (Mean) shows the mean percentage of correct answers on the test. The next two columns (High, Low) show the highest and lowest percentages made by students on each of the exams. The very last column in the table (% ≥ 50%) shows the percentage of students making over 50% on the test.

Dr. Beard gave the test in his Advanced Financial Management night class in fall, 2005. The test was required of everyone in the class. To induce students to do their best, Dr. Beard thoroughly discussed the reason for the test (to improve the program) and the importance of students doing their best.

Analysis

The results of the assessment tests from previous years have been used to understand the strengths and weaknesses of the finance program. The main findings from the previous tests are that students are able to answer 50% to 55% of the assessment questions correctly. These results have given the finance faculty an idea of students’ strengths and weaknesses with respect to certain finance topics. The results have also led to a serious discussion among the finance faculty about the need for an Intermediate Finance course between the introductory and advanced finance classes. The goal of the department is to raise the mean percentage of correct answers on the assessment test to at least 60%.

The most recent test results show that the mean percentage of correct answers on the 2005 test (56.5%) was at the highest level since the department began administering the test. This higher percentage may be due to the changes in the finance major that are discussed below. In addition, 70% of the students made 50% or more on the test which is a marked improvement over previous semesters. Test results for the fall, 2005 semester are given at the end of this report.

Changes in the Finance Program in 2004

As a result of assessment results that have been gathered over the years, the department in 2003 decided to try to improve the quality of its finance majors by instituting several new requirements for students deciding to major in finance after March 1, 2004. One new requirement is that students must now have a “C” or better in Finc 3310 (Business Finance) to major in finance. It is hoped that this will strengthen many students’ overall background in finance, and will lead to an improvement in the quality of our finance majors. The second new requirement is that students majoring in finance, in order to graduate, will now have to have a “C” or better in all the courses that constitute the major. The improved scores on the assessment test noted above may be a result of these changes.

In a meeting on March 2, 2004 the economics and finance faculty met with Mr. Scott Settelmyer (Alltel Corp), Mr. Cory Pratt (Arkansas Capital Corp. Group, and a former student), and Ms. Natalie Doyel (also a former student) to gather input from some of our stakeholders regarding our most recent assessment test results, and to discuss the program in general. Assessment test results (as well as results from the most recent administration of the ETS test) were shared with the faculty and the guests present. There was much discussion as to why finance majors were able to answer only approximately 50% of the assessment test questions. After reviewing some of the assessment test questions, it was decided that many of the questions were confusing and should be revised. In a follow up meeting, the finance faculty made various changes to the test to make sure that all questions were clear and unambiguous. Some other suggestions made by our former students during the meeting were that:

1. We should have better continuity (or more coordination) between our finance classes to insure that there is as little duplication as possible, and that there are no gaps in coverage.
2. We should consider introducing another class that would serve as a bridge between Finc 3310 and the our case course (Finc 4395).
3. We should consider more sequencing of courses in the major rather than letting students take courses in any order. This would allow better coordination among the courses in the finance major.
4. Problem solving should be emphasized more heavily in some of the finance courses.
5. Professors should insure that they explain the ‘why’ of something rather than just stating a result or putting a formula on the board. Many students are afraid to ask questions.

No meeting similar to that described above was held in 2005. The reason is that the department felt that a meeting so soon after the meeting in 2004 would have produced essentially the same comments and suggestions (as at the 2004 meeting).