FNCE10002 Principles of Finance
The Complete Exam Bible · SM2 2026FNCE10002 Overview
- Faculty of Business and Economics
- Semester 2, 2026
- an undergraduate level 1 subject
- 12.5 points
FNCE10002 covers financial mathematics, debt and equity valuation, risk and return, diversification, CAPM, capital budgeting, WACC, capital structure, payout policy and introductory options. It is taught within Faculty of Business and Economics. It is an undergraduate level 1 subject. It carries 12.5 points.
- Timeline first Every finance calculation starts by fixing cash-flow dates and the valuation date.
- Rate units must match A monthly cash flow cannot be discounted safely with an annual rate unless the convention is converted.
- Diversification is covariance Portfolio risk depends on co-movement, not merely the number of securities.
- No component hurdle The current S2 guide states that no single assessment must be passed separately.
How FNCE10002 is assessed
| Component | Weight | Format |
|---|---|---|
| Four peer-reviewed tasks | 15% | Throughout semester; three highest of four task marks count under the current subject guide |
| Mid-semester Examination | 25% | 60-minute in-person MCQ exam in the week of 14 September 2026 |
| Final Examination | 60% | 120-minute in-person examination during the official exam period |
Semester 2 has four peer-reviewed tasks worth 15%, a 60-minute in-person mid-semester exam worth 25% in the week of 14 September, and a 120-minute in-person final exam worth 60%. The current S2 subject guide explicitly states that there are no hurdle requirements.
Current FNCE10002 dates
| Date | Item | Control |
|---|---|---|
| week of 14 September 2026 | Mid-semester Examination | 25%, 60 minutes, in person during the scheduled lecture stream. |
| 25 August 2026 at 9:00 am | Peer-review Task 1 answer submission | Lectures 1-3; review due 1 September. |
| 20 October 2026 at 9:00 am | Peer-review Task 4 answer submission | Review due 25 October at 11:59 pm. |
Current-offering dates captured in the course materials. Confirm changes and exact submission settings in the live LMS.
What FNCE10002 covers
Start with Financial Mathematics and Time Value; use CAPM and Asset Pricing as the turning point; finish by bringing the course together in Options and Basic Risk Management.
Financial Mathematics and Time Value
time value of money · future value · present value · move cash flows between dates with a matching rate and compounding period02Annuities, Loans and Debt Securities
annuity · amortisation · bond yield · value repeated payments, loan balances and coupon securities on one timeline03Equity Valuation and Market Information
ordinary share · dividend discount model · market information · connect expected dividends, growth and required return to a share value04Risk, Return and Diversification
expected return · variance · covariance · combine assets by weight and co-movement rather than averaging risk05CAPM and Asset Pricing
systematic risk · beta · capital asset pricing model · estimate and interpret required return from market exposure06Capital Budgeting and WACC
net present value · incremental cash flow · weighted average cost of capital · build incremental cash flows, discount them and interpret NPV with a matched WACC07Capital Structure and Payout Policy
financial leverage · capital structure · payout policy · connect leverage and payout choices to risk, taxes, flexibility and investment needs08Options and Basic Risk Management
call option · put option · option payoff · draw long and short option payoffs and connect them to a basic hedgeIt is positioned as the first subject in the faculty finance sequence and also suitable as a standalone finance subject.
The 60% final exam makes breadth and clean time-value-of-money reasoning critical, while peer-review tasks require genuine handwritten practice rather than answer accuracy alone.
Assessment in fnce10002 is distributed as follows: four peer-reviewed tasks worth 15%, a 25% mid-semester exam and a 60% final exam
The operational assessment conditions matter here.
The current S2 guide specifies a 60-minute in-person MCQ mid-semester exam and a 120-minute in-person final exam.
What makes fnce10002 demanding is concrete: aligning dates, compounding and risk assumptions before calculation, then explaining what a correct number does and does not imply for investment or financing choice
The S2 2026 subject guide explicitly states there are no hurdle requirements; the overall subject pass standard still applies.
For enrolment planning, Confirm eligibility in the current Handbook; the subject is quota-managed and offered in Summer, Semester 1 and Semester 2.
Start with Financial Mathematics and Time Value; use CAPM and Asset Pricing as the turning point; finish by bringing the course together in Options and Basic Risk Management.
Compare two project cash-flow patterns
- 1Place both projects on the same year-0 timeline.
- 1Discount every future cash flow at 8% per year.
- 1Compute NPV A and NPV B.
- 1Compare mutually exclusive values on the same scale.
- 1Stress the rate and risk assumptions before recommending.
Key terms
- time value of money
- Principle that cash at different dates has different value because of opportunity cost and risk. This chapter uses the concept when students move cash flows between dates with a matching rate and compounding period.
- future value
- Value at a later date after compounding a present amount. It helps explain the reasoning required to move cash flows between dates with a matching rate and compounding period.
- present value
- Current equivalent of a future cash flow after discounting. Its limit matters because a rate, period count and cash-flow frequency must use the same time unit.
- annuity
- Finite sequence of equal cash flows at regular intervals. This chapter uses the concept when students value repeated payments, loan balances and coupon securities on one timeline.
- amortisation
- Repayment pattern allocating each payment between interest and principal. It helps explain the reasoning required to value repeated payments, loan balances and coupon securities on one timeline.
- bond yield
- Rate equating a debt security's promised cash flows with its current price under stated assumptions. Its limit matters because quoted yields and payment frequency must be converted consistently and default or reinvestment risk remains.
- ordinary share
- Residual ownership claim whose cash distributions and terminal value are uncertain. This chapter uses the concept when students connect expected dividends, growth and required return to a share value.
- dividend discount model
- Valuation of equity as the present value of expected future dividends. It helps explain the reasoning required to connect expected dividends, growth and required return to a share value.
- market information
- Public and private signals incorporated into investor expectations and prices with varying speed and quality. Its limit matters because a small change in long-run growth or required return can dominate the estimate.
- expected return
- Probability-weighted average of possible investment returns. This chapter uses the concept when students combine assets by weight and co-movement rather than averaging risk.
- variance
- Expected squared deviation of return from its mean. It helps explain the reasoning required to combine assets by weight and co-movement rather than averaging risk.
- covariance
- Measure of how two security returns move together. Its limit matters because historical estimates may not represent future distributions or extreme dependence.
- systematic risk
- Market-related risk that remains after broad diversification. This chapter uses the concept when students estimate and interpret required return from market exposure.
- beta
- Sensitivity of an asset's return to movements in the market return under the fitted model. It helps explain the reasoning required to estimate and interpret required return from market exposure.
FNCE10002 FAQ
How is fnce10002 assessed?
four peer-reviewed tasks worth 15%, a 25% mid-semester exam and a 60% final exam
What is the fnce10002 exam or final-task format?
The current S2 guide specifies a 60-minute in-person MCQ mid-semester exam and a 120-minute in-person final exam.
Does fnce10002 have a hurdle or component-level pass rule?
The S2 2026 subject guide explicitly states there are no hurdle requirements; the overall subject pass standard still applies.
Which offering does this fnce10002 guide cover?
It is aligned to Semester 2, 2026; confirm your enrolled class and timetable in the current institutional system.
Is this fnce10002 resource an official university guide?
No. It is an independent fnce10002 study resource; current institutional instructions remain authoritative for assessment operation.
How should time value of money be used in FNCE10002?
Principle that cash at different dates has different value because of opportunity cost and risk. This chapter uses the concept when students move cash flows between dates with a matching rate and compounding period. Use it to move cash flows between dates with a matching rate and compounding period; remember that a rate, period count and cash-flow frequency must use the same time unit.
Where do students usually lose marks in fnce10002?
aligning dates, compounding and risk assumptions before calculation, then explaining what a correct number does and does not imply for investment or financing choice
How to study for the exam
Retrieve the course map, practise the recurring method—place cash flows on a common valuation date, match rate and period conventions, calculate price or return, interpret risk and financing effects, then stress the assumptions that could reverse the decision—on changed scenarios, and verify every operational assessment detail in the live institutional system.
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