Guest editorial

Citation

Waggle, D. (2009), "Guest editorial", Managerial Finance, Vol. 35 No. 5. https://doi.org/10.1108/mf.2009.00935eaa.001

Guest editorial

Article Type: Guest editorial From: Managerial Finance, Volume 35, Issue 5.

During the past 20 years the financial knowledge required for the average person to survive in the world has increased substantially. A generation ago, employees depended on their companies to provide defined benefit plans; today, many employees must make their own choices within a defined contributions plan. The available types of home mortgages have greatly expanded, leaving homebuyers with many financial decisions to make. The mutual fund industry and discount broker markets have exploded and today a large percentage of the population is making its own investment decisions without the help of financial professionals. Automobile leases have become common. These are just some examples of where individuals are now expected to make financial decisions that just a few years ago were much simpler or were being made by someone else on their behalf.

Meanwhile, at the same time individuals have been expected to shoulder the increasingly complex financial decisions in the market place, the dangers seem to have increased greatly. Just within the past 10 years, we have seen the bursting of the technology bubble, the collapse of Enron and World Com and the collapse of the US housing market. During just the past few months various governments around the world have had to prop up and effectively nationalize companies and industries in ways which would have been unimaginable a year ago. Banks are failing, insurance companies are failing, and various industries are pleading for and demanding bailouts. We have recently seen the exposure of possibly the largest financial fraud in history, the collapse of Bernard Madoff's investment empire which some sources are describing as being in essence a $50 billion Ponzi scheme.

With their new obligations, and with the financial complexities of the modern market, it is essential that business students be well armed with knowledge, for their own benefit and the benefit of their employers. With these obligations in mind, we set out to examine undergraduate finance education in the USA, creating this special issue of Managerial Finance on the topic of Financial Education.

Robert Balik kicks off this special issue with an informative article explaining how students and instructors can get the most from financial modeling with Microsoft Excel 2007. Balik explains how to use chronological modeling which is consistent with modern learning theory. Balik's methods should result in student models which are created faster, easier and with a higher degree of accuracy.

Next up in the lineup is Pankaj Aggrrawal with a paper teaching students and faculty how to automate the gathering of financial information from the World Wide Web. There is an overwhelming amount of financial information available on the Web today and it is not practical for an individual to gather all this information manually. Aggrrawal's automated system uses the Visual Basic language in Microsoft Excel to gather such information quickly and efficiently so that it can then be analyzed by the financial expert.

Continuing with the use of financial software and programs to make for better analysts, Jivendra K. Kale has created a case study to guide students through the process of gathering a variety of financial data which is then used in a portfolio optimizer to create various mean-variance efficient portfolios. Kale's case study allows finance professors to break through the typical abstract solutions found in finance cases today and offers them a practical way to teach portfolio optimization, hopefully resulting in better-informed students.

Fourth in this issue, Gary S. Robson, Yong B. Shin and J. Wilson Mixon, Jr., report on their development of a method for introducing regression into finance courses with very little start-up time. Using regression in early finance classes is often a problem as the students struggle with both the regression concept and the software application. Robson et al., have techniques which should allow faculty to help students quickly and with a good deal less stress, make fuller use of Excel's powerful statistical and graphical functions.

J. Wilson Mixon, Jr., contributed a second, single-authored paper to this collection when he wrote of how to use the Gnu Regression, Econometrics, and Time-Series Library (GRETL) program to teach financial analysis using regression. Mixon shows how this free package can be utilized to maximize student learning. GRETL is especially useful as it more powerful and easier to use than whatever software that might come with the textbook.

Finally, Gisung Moon and I examine the content of the introductory investments courses being taught at AACSB-accredited universities. We collected 101 syllabi and studied several dimensions of the course such as the textbooks being used, other required reading materials, the usage levels of financial calculators and spreadsheets, the use of stock market games, and other various components. We also report about the typical course structure, grading policies and assessment components along with topical coverage. We believe this study will be useful to professors as they prepare their investment courses and possibly to assessment efforts of departments and colleges.

I believe this special issue of Managerial Finance will be useful and helpful to faculty, students and those already in the profession. I want to thank Don T. Johnson, Editor-in-Chief, and the publisher, Emerald Group, for allowing me the opportunity to put together this special issue. I also want to verify that every paper in this special issue went through the traditional double-blind, peer-review process (Don T. Johnson served as editor for my paper with Moon).

Doug WaggleGuest Editor