Project Based Learning in Engineering Economics: Teaching Advanced Topics Using a Stock Price Prediction Model (original) (raw)
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2013 ASEE Annual Conference & Exposition Proceedings
Obispo, includes a thorough review of time value of money, investment evaluation, inflation, risk and return, financing decisions, corporate investment strategies, risk analysis and decisions incorporating non-monetary considerations. Historically this course was taught using an advanced text where the topics were covered sequentially. A redesign of the course now includes the construction of a stock price prediction model for a company of the student's choice. Through the model, the topics are covered and discussed in the context of the large model-building project. For instance, inflation is discussed when students collect historic data on the company's performance and use that data to forecast into the future. Issues of discount rate and variability in inflation become evident as students wrestle with the past and the future. The concepts of risk, return and the capital asset pricing model are introduced as students begin to understand how the required return for equity holders is not only dependent on the underlying risk of the assets, but on the leverage of the firm. Given varying levels of debt, the relative stability of the required return on the assets (as opposed to the equity) emerges as a better analysis tool. This paper will discuss this project-based method in detail and give examples of instructional pedagogy that includes "Project Based Learning," "Pull instruction," and the use of a "Flipped Classroom." In addition, student feedback on the topic is included.
A graduate level advanced engineering economics class taught at California Polytechnic State University, San Luis Obispo, includes a thorough review of time value of money, investment evaluation, inflation, risk and return, financing decisions, corporate investment strategies, risk analysis and decisions incorporating non-monetary considerations. Historically this course was taught using an advanced text where the topics were covered sequentially. A redesign of the course now includes the construction of a stock price prediction model for a company of the student's choice. Through the model, the topics are covered and discussed in the context of the large model-building project. For instance, inflation is discussed when students collect historic data on the company's performance and use that data to forecast into the future. Issues of discount rate and variability in inflation become evident as students wrestle with the past and the future. The concepts of risk, return and the capital asset pricing model are introduced as students begin to understand how the required return for equity holders is not only dependent on the underlying risk of the assets, but on the leverage of the firm. Given varying levels of debt, the relative stability of the required return on the assets (as opposed to the equity) emerges as a better analysis tool. This paper will discuss this project-based method in detail and give examples of instructional pedagogy that includes "Project Based Learning," "Pull instruction," and the use of a "Flipped Classroom." In addition, student feedback on the topic is included.
Project-Based Learning in Financials Advice
EDULEARN21 Proceedings, 2021
The efficient use of the economic resources of companies, both large enterprises and SMEs, as well as the different means to obtain these resources, are critical aspects. For this reason, the new generation of students of degrees such as Business Administration and Management should know in depth the different types of banking entities, the main asset and liability operations of banking entities and the existing risk, as well as the main challenges of the banking sector for the following years. In the same way, a profound comprehension about the stock market and the simulation models to analyse different financial situations are aspects highly valued by companies. Based on this, learning requirements arise to seek active methodologies that allow students to acquire the knowledge and key competencies that companies currently require. Among these methodologies, we would like to highlight the Project-based Learning (PBL) through which the teaching-learning process is carried out through the development of a project that tries to give an answer to a real problem. Through PBL, students develop a high degree of autonomy and responsibility, since they are responsible for planning, structuring the work and preparing the project to solve a specific problem or situation. The lecturers' work in this methodology is to guide and support students throughout all the process of project development. Therefore, this article defines a PBL model to satisfy the current needs of the market in terms of financials advice. The PBL model involves two subjects: (i) Banking and Stock Market and (ii) Advanced financial simulation techniques taught in the Degree of Business Administration and Management in the
Assessing an Undergraduate Investments Class Project
International Journal of Economics and Finance, 2015
An assessment of learning study is undertaken in an undergraduate Finance Investments class. The focus is on a required project report that constitutes 20% of the class grade. The goal of the project is to perform Fundamental Analysis on an assigned firm and recommend whether or not to invest in its common stock at this time. The assessment endeavor starts in Summer 2007 by deciding on the rubric to use for this study. Next one section (an evening class) is analyzed with the rubric as a pilot study in Fall 2007. From the pilot, two improvements are attempted in the Fall 2008 Evening class, and the Morning section is also analyzed. The study closes with a proposed action plan for improving the learning experience in both sections of Investments in future semesters.
2001 Annual Conference Proceedings
Most engineering economic analysis textbooks explain the concept of economic project risk, including methods for estimating data. However, students often do not develop an appreciation for the difficulties involved in developing estimates. The assignment discussed in this paper uses active learning to develop estimates of maintenance costs for an automobile. Students first develop estimates without any guidance. Data simulating partial historical data for maintenance costs for a rental car fleet is then created for a class exercise. The data follows a beta distribution with known parameters, although the students are unaware of this at the time. Students are provided with a histogram showing 'their' data and are asked to estimate the optimistic, pessimistic and most likely values from the graph. The mean and variance for the distribution is calculated using the common estimation equations for the beta distribution. Finally, the mean and variance of the sample data is calculated and compared to the mean and variance obtained through the estimation. This provides a clear example of the pitfalls associated with relying on an interpretation of data, or intuition, rather than using the data itself, since the estimated variance is generally radically different from the analytical variance. This exercise also provides the instructor an opportunity to discuss topics such as sampling, graphing, spreadsheet usage, optimistic/most likely/ pessimistic techniques, statistical analysis and parameter estimation.
Enhancing learning in the Finance classroom
8th International Conference on Higher Education Advances (HEAd'22)
This paper aims to describe a teaching-learning experience based on Project-Based Learning (PBL). This experience is part of an educational innovation project devoted to transforming finance classes in various facets of financial advice. Specifically, the article focuses on the transformation process of a subject that studies financial markets and the assets traded in them. Based on this experience, the classroom becomes a financial consulting firm that advises investors on how to invest their capital. The results show us a remarkable active dedication of the students to the course, improved knowledge and marks. In addition, the development of skills and values such as teamwork, autonomy, solidarity, equality, and professional skills are elements that encourage us to continue along this line.
Educational Prediction Markets: A Construction Project Management Case Study
2013
Effective teaching of engineering concepts relies both on carefully designed lesson plans that meet specific learning outcomes, and on classroom activities that students find engaging. Without student engagement, even the best designed plans will fail to meet their outcomes. In other words, students need to be actively involved in the learning process. The objective of this paper is to present a case study of applying a novel active learning method, specifically educational prediction markets (EPM), for teaching project management classes at a major research university. This method was investigated for its effectiveness in engaging students, as well as promoting learning of probabilistic reasoning without explicit teaching. Student surveys, following the EPM implementation, revealed both advantages and disadvantages. The two key benefits reported by the students were: a) providing better connections between the materials taught in the class and realities of construction projects, and b) increasing overall interest and enthusiasm in learning about project risk management due to the game-like nature of the process. The main disadvantage was disengagement by a subset of students due to perceptions that fellow students were manipulating the market results.
Revolutionizing Financial Engineering Education
2013
On May 6, 2010, world financial markets experienced The Flash Crash, which affected trillions of dollars of securities in just mere minutes. Consensus of what caused this dramatic change in the market evaluation of thousands of assets is still not fully understood. To tackle problems like these, financial engineering students need a comprehensive understanding of complex market microsystems. These students must have a multidisciplinary skillset that incorporates an ever- widening array of disciplines to address markets that have grown increasingly tangled. Fundamental understanding of today’s financial markets requires students take courses in statistics, mathematics, computer programing, finance, and economics; however, due to the limited material that a single course can cover, traditional coursework cannot effectively teach the multidisciplinary competencies that are necessary. In order to reduce the course load yet still learn fundamental financial engineering principles, we suggest taking a constructivist approach using market simulations as teaching tools. Simulations allow financial engineering students to learn the complex nature of markets more comprehensively and effectively by allowing them real-world experience in controlled, guided environments. Research supports their use and has shown simulations engage students and give them real-time knowledge of cause and effect in a complex marketplace. Moreover, they go beyond simply providing factual knowledge to offering students experience operating in the microstructure of markets. This environment also forces students to encounter unanticipated situations that traditional education methods do not allow. In that spirit, this paper will present the use of simulations in a simulation-based lesson that will teach students how to devise and implement their own trading strategies, as well as give them invaluable experience in integrating the basics of statistics, programing, and design. This paper adds to the body of research that illustrates simulations have the ability to get students emotionally invested in learning and thereby more receptive to the minutia of financial markets and trading techniques. Simulation-based education can augment traditional education methods by providing a learning environment that promotes more skills and techniques to foster better fundamental knowledge. "
Enriching the Engineering Economics Class
2017 ASEE Annual Conference & Exposition Proceedings
This paper describes an effort to enrich the Engineering Economics course by adding readings, class discussion topics and a research paper. The goal is to help students understand the nonquantitative side of engineering economics. In particular, students are exposed to examples of using engineering or business techniques to benefit people in need, and to introduce notions of risk and the quality movement.
Educational markets: A constructed project management case study.
Effective teaching of engineering concepts relies both on carefully designed lesson plans that meet specific learning outcomes and on classroom activities that students find engaging. Without student engagement, even the best designed plans will fail to meet their outcomes. In other words, students need to be actively involved in the learning process. The objective of this paper is to present a case study of applying a novel active learning method, specifically educational prediction markets (EPM), for teaching project management classes at a major research university. This method was investigated for its effectiveness in engaging students and promoting learning of probabilistic reasoning without explicit teaching. Student surveys, following the EPM implementation, revealed both advantages and disadvantages. The two key benefits reported by the students were: (1) providing better connections between the materials taught in the class and realities of construction projects; and (2) increasing overall interest and enthusiasm in learning about project risk management as a result of the gamelike nature of the process. The primary disadvantage was disengagement by a subset of students because of perceptions that fellow students were manipulating the market results.