Atlanta, Georgia
June 23, 2013
June 23, 2013
June 26, 2013
2153-5965
Engineering Economy
14
23.991.1 - 23.991.14
10.18260/1-2--22376
https://sftp.asee.org/22376
370
Project based learning in engineering economics: Teaching advanced topics using a stock price prediction modeling Abstract: An advanced engineering economics class is taught at University X. The topics include a thorough review of time value of money and 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 are 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 historical 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. Another example is the concept of risk and return and the capital asset pricing model. Students do 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 also. 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 method has been used for two consecutive years with good results. This paper will discuss this project-‐based method in detail and give examples of instructional pedagogy. In addition, student feedback both qualitative and from the Course Valuing Inventory (Nehari, et al) survey instrument will be included and evaluated.
Schlemer, L. T. (2013, June), Project based learning in engineering economics: Teaching advanced topics using a stock price prediction modeling Paper presented at 2013 ASEE Annual Conference & Exposition, Atlanta, Georgia. 10.18260/1-2--22376
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