Ph.D. in the Finance Area

Overview 

Financial economics studies how investors determine the value of assets in financial markets (asset pricing), how firms allocate their resources and make financial decisions (corporate finance), and how financial institutions and markets facilitate financial transactions (financial intermediation). Topics in finance include: portfolio management, pricing of assets and contingent-claims, the theory of the firm, financial risk management, the role of financial markets and institutions, corporate investment and financing decisions, and others. The main goal of the finance doctoral program is to train students to do high-quality research in any of these areas and to prepare them for a career as a professor of finance at top academic research institutions. To achieve this goal, Ph.D. students are required to take courses in economics, statistics, econometrics, and finance, and to write research papers examining important and relevant issues in financial economics.

Requirements 

In addition to the requirements described in Chapters 1 and 6 of this guide, doctoral students who have chosen finance as their area must satisfy the following requirements for a Ph.D. degree.

Course, Research Work and Dissertation Advisor 

1. The student’s course work must be approved by the area faculty advisor.
2. During the student’s first year, he or she must take a minimum of four courses per semester.
3. The student is required to take at least 6 credits of BUSI 524 - Advanced Topics in Finance.
4. The student is expected to attend all research seminars organized in the finance area during the student’s tenure in the Ph.D. program. Moreover, during the second and third years, the student must formally register for the finance research seminar and attend presentations of faculty members from other business schools who visit JGS to present their research. The student must write a short summary and critical comments on two papers presented in the research seminar during the semester. These reviews are to be submitted to the area advisor and will be graded by a subset of area faculty for a Pass/Fail grade.
5. Students are expected to be fully engaged in research during all the summers, including the summer of their first year, of their tenure in the Ph.D. program.
6. Students must have a Jones School finance faculty member who has agreed to serve as their dissertation advisor by the end of the spring semester of their third year in the program.

Exam Requirements 

1. Students must successfully pass a comprehensive exam in microeconomics administered by the economics faculty at the end of the first year.
2. Students must successfully pass a comprehensive exam administered by the finance faculty at the end of the second year. The exam will be administered and graded by finance faculty, under the supervision of the finance area advisor. The exam is focused on the coursework taken in finance and also measures the student’s knowledge of the area as a whole. A successful performance in the exam will demonstrate the student’s competency in finance and provide the foundation from which he or she begins the research that will form the basis of the dissertation.

Third-Year Research Paper
Each student must write and present a solo-authored original research paper at a workshop during their third year in the program. The paper must be completed by the end of the fall semester of the student's third year in the program. The paper must be approved by two tenure-track finance faculty members. If approved, the student must present the paper in a faculty workshop by the end of the spring semester of the student's third year in the program. The specific procedures are as follows:

(1) By August 1st after the student’s second year in the program, a student must submit a copy of the Third-Year Paper Topic Approval Form  to the Finance area advisor, signed by two JGSB faculty members, who approve the topic and agree to serve as readers of the paper. If, at any point, the student changes topics, the student must get faculty approval for the new topic and submit a new form to the Ph.D. area advisor.

(2) A student must submit a detailed outline of the paper and a copy of the Third-Year Paper Outline Approval Form, signed by the two faculty readers, to the Finance area advisor by September 15 of the student's third year in the program. The outline for an empirical paper should include: (1) the research hypothesis, 2) motivation for the research hypothesis, (3) description of the data, (4) description of the empirical tests, and (5) the expected contribution to the literature. The outline for an analytical paper should include: (1) the basic phenomenon under study, (2) the economic setting, (3) the modeling approach, (4) the fundamental assumptions, and (5) the expected contribution to the literature. The outline should also include references to the related literature investigating the research topic and to any studies underpinning the analytical methods to be used.

(3) A student must submit a copy of the completed third-year paper to the Finance Faculty advisor and to the two faculty readers by December 15 of the student's third year in the program.

(4) A student's two faculty readers must affirm that the paper is satisfactory by January 30 of the student's third year in the program. The faculty readers will notify the Finance Faculty advisor to the Ph.D. program by submitting the Third-Year Paper Evaluation Form.

(5) A student must present the third-year paper at a faculty research workshop during the spring semester of the student's third year in the program and at least one of the faculty readers must be present and sign the Third-Year Paper Presentation Form, stating that the presentation is acceptable.

Failure to complete the Third-Year Paper requirement, as outlined above, will mean that the student is not making satisfactory academic progress in the Ph.D. Program and is grounds for dismissal from the doctoral program.
 

Sample Course Sequence
The course curriculum is designed around a challenging course of study in both the theory of financial economics and in cutting edge empirical work. Here is a sample course sequence for a doctoral student in finance. Doctoral students may continue taking courses beyond their second year.

Summer before the beginning of first semester
Quantitative Methods Review and Workshop in Statistical Computing and Research

Doctoral students will continue taking graduate-level finance courses beyond their second year as well.  Examples of elective courses are:

BUSI 504 - Game Theory

BUSI 530 - Introduction to Accounting Research

BUSI 531 - Empirical Methods in Accounting

BUSI 532 - Analytical Research in Accounting

ECON 405 - Game Theory and Economic Behavior

ECON 509 - Microeconomics III

ECON 502 - Macroeconomics/Monetary Theory I

ECON 503 - Macroeconomics/Monetary Theory II

ECON 511 - Econometrics II

ECON 514 - Industrial Organization and Control

ECON 523 - Dynamic Optimization

ECON 579 - Topics in Econometrics

STAT 522 - Advanced Bayesian Statistics 

STAT 552 - Applied Stochastic Processes

STAT 581 - Mathematical Probability I

STAT 582 - Mathematical Probability II

STAT 622 - Bayesian Data Analysis

STAT 650 - Stochastic Differential Equations

 

Course Descriptions 

BUSI 521: Finance I
This course is an introduction to portfolio choice and asset pricing theory. Topics include expected utility maximization, stochastic discount factors, arbitrage, mean-variance analysis, representative investors, and beta-pricing models. Single-period and dynamic models are studied.

BUSI 522: Finance II
The purpose of this course is to provide a background for understanding the major research directions in corporate finance. Topics include theory of the firm, capital structure, external financing decisions, payout policy, agency problems, corporate control and governance, investment decisions, and the role of financial institutions in corporate transactions.

BUSI 523: Empirical Methods in Finance
This course is an introduction to empirical research in finance, covering the techniques most often used in the analysis and testing of financial economic theory. The course covers both time-series and cross section methods. Topics include event studies, empirical tests of asset pricing models, forecasting relationships, return predictability in the time-series and cross-section, asset pricing anomalies, and specification and identification issues in corporate finance.

BUSI 524: Advanced Topics in Finance
This course covers various topics in financial economics. Topics may vary from year to year, and the course may be repeated for credit with the consent of the Ph.D. advisor for the finance area. The course may be offered either for 1.5 or for 3 units of credit.

 

Candidacy 

Certification of Candidacy indicates that a student has reached the advanced stage of the Ph.D. Program, permitting him/her to devote full time to writing a dissertation. At least eight months must elapse between admission to candidacy and conferral of the degree. The requirements for candidacy are:

(1) Successful completion of the course work requirements,
(2) Successful completion of the examination requirements.