MAROUN SEMAAN FACULTY OF ENGINEERING AND ARCHITECTURE DEPARTMENT OF INDUSTRIAL ENGINEERING AND MANAGEMENT COURSE SYLLABUS ENMG 602 Introduction to financial Engineering Fall 2025-2026

General Course Information

Table 1: Overview of Course Information

General Information

Course Number	ENMG 602
Course Title	Introdution to Financial Engineering
Number of Credits	3
Course Level	graduate
Course Format	Face-to-Face
Pre-requisite Courses	INDE 301 or equivalent
Required/Elective	Required
Meeting Schedule
Meeting Location

Course Coordinator, Instructors and Teaching Assistants

Table 2: Contact Information for Course Coordinators, Instructors, and Teaching Assistants

Name	Role (Instructor, Coordinator, TA,)	Office Location	Office Hours	Extension	E-mail
Bacel Maddah	Professor	Bechtel 319A	bm05@aub.edu.lb

Course Description

Financial Engineering (FE) is the tailoring of cash flows over time to be as desirable as possible. This involves the scientific design of “financial products” which are traded in the financial markets. Examples of financial products (also known as financial instruments or securities) include bonds, stocks, futures, and options. This course aims to (i) introduce the student to financial accounting, the investment process and financial markets; and (ii) to give the student a flavor of FE applications. The course is divided to two parts. The first part covers the basics of financial accounting. It provides the student with a working knowledge of the accounting process and its usage in assessing the financial performance of organizations. This also enhances the understanding of the “big picture” (i.e., the business environment where FE is implemented). The second part is on FE applications to “fixed- income” securities involving deterministic cash flow streams. These applications include pricing and portfolio structuring of bonds, capital budgeting, cash matching, dynamic investment management and firm valuation.

Course Learning Outcomes

Upon completion of the course, students will be able to:

CLO1. Define the key concepts of the Generally Acceptable Accounting Principles (GAAP), e.g., recognition, matching, accrual accounting

CLO2. List the methods of investments and financing

CLO3. Carry out transactions analysis and identify those that should be recognized, develop journal entries for recognized transactions and utilize them to build financial statements.

CLO4. Analyze financial statements and use the analysis to asses performance of companies

CLO5. Explain and give examples on the limitation of accounting analysis in giving a clear image of a company’s economic performance

CLO6. Perform Interest calculations and economic feasibility analysis

CLO7. Explain the relation between bond prices, bond yields, and interest rates

CLO8. Work with the term structure of interest rates, obtain spot and forward rates from the short rates

CLO9. Design a portfolio of bonds which is immune to interest rate fluctuations

CLO10. Formulate and solve financial optimization problems including capital budgeting cash matching, firm valuation, and dynamic cash management

CLO11.

CLO12.

CLO13.

CLO14.

CLO15.

Program Learning Outcomes Addressed in The Course

Explicitly indicate which of the program learning outcomes are addressed in the course.

PLO1. Research Methods: Analyze qualitative and quantitative information while conducting or applying research related to their graduate program.

PLO2. Advanced Core Knowledge in the Discipline: Analyze core concepts and theories in different areas of study in their discipline.

PLO3. Written Communication Skills: Demonstrate scholarly communication skills in clear, detailed and well-structured scientific written format consistent with high standards of their discipline.

PLO4. Professionalism and Ethical Conduct: Apply professionalism and ethical research conduct in their discipline.

PLO5.

PLO6.

PLO7.

PLO8.

PLO9.

PLO10.

PLO11.

PLO12.

PLO13.

PLO14.

PLO15.

Course Resources and References

Indicate textbook title, author, and year. Include a link to the Moodle page or the course web page.

Antle, R. and S. J. Gartska (2004). Financial Accounting, Thomson. (Out of print, available here.) Antle, R. and S. J. Gartska (2004).	Financial Accounting: Questions, Exercises, Problems and Cases, Masters Edition, Thomson. (Out of print, selected chapters available here.) Luenberger, D. G. (2014). Investment Science, 2nd Edition, Oxford University Press. https://sites.aub.edu.lb/bacel/enmg-602/ Derman, E. (2004). My Life as a Quant, Wiley. Bernstein, P. (2007). Capital Ideas Evolving, Wiley.Kimmel, P. D., J. J. Weygandt and D. E. Kieso (2004). Financial Accounting: Tools for Business Decision Making, Wiley.Malkiel, B. (2007). A Random Walk down Wall Street, Norton.Sharpe, W. F., G. J. Alexander and J. V. Bailey (1999). Investments, Prentice-Hall. Sullivan, W. G., E. Wicks and J. Luxhoj (2003). Engineering Economy, Prentice-Hall.Taleb, N. N. (2007). The Black Swan: The Impact of the Highly Improbable, Random House. Wild, J. J (2008). Financial Accounting: Information for Decisions, McGraw-Hill.

Course Outline

Include the topics covered and learning activities (assignments, projects, term papers, etc.) with their due dates. Indicate the alignment of topics/ learning activities with the Course Learning Outcomes.

Table 3: Course Schedule Overview

Week	Date	Topic	Learning Activities and Due Dates	Alignment with CLOs
1	Introduction to financial accounting. Financial statements, decision making, economic concepts: Value, wealth, income, generally accepted accounting principals (GAAP), institutional context (Chapter 1, Antle).	CLO1-2
2	Introduction to financial accounting. Financial statements, decision making, economic concepts: Value, wealth, income, generallyaccepted accounting principals (GAAP), institutional context (Chapter 1, Antle).	CLO1-2
3	Balance sheet concepts. Assets, liabilities, equities, accounting identity, balance sheetconstruction, analysis and ratios (Chapter 2, Antle).	CLO3-4
4	Balance sheet concepts. Assets, liabilities, equities, accounting identity, balance sheetconstruction, analysis and ratios (Chapter 2, Antle).	CLO3-4
5	Income statement concepts. Income, revenues, expenses, adjustments, accrual ac-counting, income statement construction, analysis and ratios (Chapter 3, Antle).	CLO3-4
6	Statement of cash flows. Cash and cash flow concepts, operations, investing and financing activities, construction of cash flow statements, articulation of statements, analysisand ratios (Chapter 4, Antle).	CLO3-4
7	Financial Statements Analysis and Limitations (Chapter 5, 6, and 7, Antle)	CLO4-5
8	Midterm Exam	CLO1-5
9	Basic Theory of Interest (Chapter 2, Luenberger)	CLO6
10	Fixed-income securities. Bonds detail, yield,duration, immunization, convexity (Chapter 3, Luenberger).	CLO7,9
11	Term structure of interest rates. Term structures, forward rates, term structureexplanations, expectation dynamics, duration, immunization. (Chapter 4, Luenberger).	CLO8-9
12	Applied interest rate analysis. Capital budgeting, optimal portfolios, dynamic cash flow processes, the Harmony theorem, valuationof a firm (Chapter 5, Luenberger).	CLO10
13	Applied interest rate analysis. Capital budgeting, optimal portfolios, dynamic cashflow processes, the Harmony theorem, valuation of a firm (Chapter 5, Luenberger).	CLO10
14	Final Exam	CLO6-10
15

Indicate mode of delivery as Lecture, Recitation, Laboratory, Team-based Learning, etc.

Include all methods for assessing student achievement, including assessment rubrics for evaluating the learning activities.

Grading Criteria

Table 4:Evaluation Criteria and Percentage

Type of Evaluation	Percentage
Assignments and Case Studies	20%
Midterm Exam	30%
Paper	20%
Final Exam	30%
Total	100%

Course Policies

Attendance

For undergraduate courses:

“Students who miss more than one-fifth of the sessions of any course prior to the withdrawal deadline can be withdrawn from the course by the instructor.”

For graduate courses:

“A student who is absent without excuse for more than one third of the number of sessions in any course may be dropped by the instructor of the course”.

Credit Hour Policy

“This course follows AUB Credit Hour Policy for one credit courses. This course meets twice weekly for 3 academic hours per week. The course also includes independent out-of-class assignments for academic hours per week.”

Submissions and Due Dates

Homework exercises will be assigned and graded frequently. Students are encouraged to discuss the exercises among themselves but are required to submit their answers in writing individually indicating the names of the students they collaborated with. This course is applied and therefore solving exercises is the best way to understand the material.Students are required to hand-write (on paper or tablet) the solutions to the homework exercises unless otherwise indicated.

Missing Projects/Assignments

Missing work will be assigned a grade of zero. Late submissions will start at 90% of the maximum points available and assignment grade will decrease by 2 points for each day thereafter. It should be noted that no assignment will be accepted for credit more than three (3) days after its original due date. Late submissions without pre-clearance will start at 80% of the maximum points available.

Final Examinations:

Please note that students are expected to be on-campus and available to take a final examination for any of their courses at anytime during the final examination period. Students and professors will be notified of the final examination schedule being posted on the Office of the Registrar website as soon as feasible after the change of schedule period (drop and add).

Make-up Quizzes and Exams

A final exam will be scheduled. Students are not allowed to miss an exam except for a valid medical excuse

Group Work

Individuals must contribute their fair share to any group effort resulting in a deliverable to the instructor. In addition, everyone in the group will be held accountable for the quality, originality and proper sourcing of the entire group product. Non-participating students will have a zero grade on team projects and assignments.

Teaching Strategies and Technology Tools

Students will be expected to use MS office, Wed browsing, Moodle, Turnitin and other relevant technologies.

Use of AI in the Course

AI can be used for research and information gathering, for writing assistance like grammar, spelling checks, and formatting of documents. AI CANNOT be used as an original work, or for exam and quiz assistance or to paraphrase sentences. AI detection tools will be used to check assignments and violating papers will be given a non-negotiable zero grade.

University Rules and Regulations

General Academic Information

Undergraduate Academic Information

Graduate Academic Information

University - Course Withdrawal Policy

A student can withdraw from only one required course per semester. Students who wish to withdraw from more than one required course in any given semester must petition the appropriate faculty committee for permission to do so. Check Withdrawal Information from undergraduate and graduate catalogue.

Academic Integrity (cheating and plagiarism)

Please refer to AUB Student Code of Conduct, in particular section 1.1, which concerns academic misconduct including cheating, plagiarism, in-class disruption, and dishonesty. Please be aware that misconduct is vigorously prosecuted and that AUB has a zero tolerance policy. Course policy is that credible evidence of cheating will result in course failure.

Accessibility Statement to Acknowledge the Unique Learning Needs of Students with Disabilities

AUB strives to make learning experiences as accessible as possible. If you anticipate or experience academic barriers due to a diagnosed disability (including learning disability, mental health, chronic or temporary medical conditions), please contact the Accessible Education Office as soon as possible in order to help establish reasonable accommodations and facilitate a smooth learning process: accessibility@aub.edu.lb; +961-1-350000, x3151; West Hall, 338.

Failure to implement the accommodations provided by the Accessible Education Office constitutes a violation of AUB's non-discrimination policy, and may be reported to the Equal Opportunity Officer/Title IX Coordinator who also serves in the role of Section 504 Coordinator, at 01-350000 ext. 2514, titleix@aub.edu.lb.

Non-Discrimination and Anti-Discriminatory Harassment, including Sexual Harassment at AUB https://www.aub.edu.lb/President/oeo-titleix/Pages/syllabus.aspx

In line with its commitment to the principle of equal opportunity in admission, education, and employment, AUB policies protect you from discrimination and discriminatory harassment, including sex discrimination and sexual harassment, in alignment with the objectives of Title IX of the U.S. Education Amendments of 1972.

The policies are applicable to all the AUB Community including: officers, faculty, staff, academic appointees, students (including medical interns and residents), visiting students, alumni, trainees, visitors, contractors, subcontractors, suppliers, located on campus and at AUB Medical Center, Advancing Research Enabling Communities Center (AREC), or any other facility or program affiliated with the University. The “AUB Community" also includes the dependents and domestic employees of faculty and staff dwelling on campus and at AREC.

If you think you have experienced discrimination, discriminatory harassment, or sexual harassment, we encourage you to inform the Title IX Coordinator, Mitra Tauk at 01-350000 ext. 2514, titleix@aub.edu.lb, report to a Title IX deputy at your faculty or at any other faculty (www.aub.edu.lb/titleix), or report online (www.aub.ethicspoint.com).

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AUB Grading System

https://www.aub.edu.lb/Registrar/Pages/academic-information.aspx

Numeric Course Grade to Letter Course Grade Grade Conversion Chart Table 5:Numeric Course Grade to Letter Course Grade Table 6: Grade Conversion Chart Starting with Numeric Course Grade /100 Corresponding Course Letter Grade Course Letter Grade Quality Points < 60 F A+ 4.3 60 D A 4.0 61–62 D+ A– 3.7 63–65 C– B+ 3.3 66–68 C B 3.0 69–71 C+ B– 2.7 72–74 B– C+ 2.3 75–78 B C 2.0 79–82 B+ C– 1.7 83–86 A– D+ 1.3 87–92 A D 1.0 93–100 A+ F 0.0

Note: The GPA at AUB is capped at 4.0​​

I ​P ​PR ​W NP ​Incomplete ​Pass ​In Progress ​Withdraw ​No Pass