Case Studies and Active Learning in Finance
In Winter 2016, my first quarter teaching at DU, I taught two courses in the Investments sub-field of Finance. The first is a core course for finance majors, Investments, which introduces students to the institutional details of the investing process and how to invest optimally and evaluate investment performance. The second course, Fixed Income, is a cross-listed undergraduate and graduate elective course about investing in bond markets and related contracts called derivatives.
These courses are both quantitatively and conceptually rigorous in nature. Moreover, the students have a variety of mathematical backgrounds and levels of motivation. Investments has students from several of the business majors, including less technical ones, and Fixed Income combines undergraduate and graduate finance majors. Hence, the challenges in these courses include:
- Engaging the less motivated students
- Offering enough rigor to keep the technically able and motivated students interested
- Delivering material in a manner/pace that gives the less technically able students a chance to learn the material.
Prior versions of these courses used traditional lecture formats of presentation and relied primarily on exams for assessment. I tried to improve on these formats to address challenges 1-3 above by assigning case studies, mostly published by the well-known Harvard Business Publishing. In addition to addressing the challenges above, cases benefit students who tend to learn more effectively by induction, as opposed to deduction, because cases come from real-life finance-industry decisions, and the same concepts apply to many other finance problems. Moreover, using cases and case discussion necessitates grading participation, which has a secondary benefit of promoting interaction and engagement in delivering lectures. When I lecture, students respond more to questions that I pose in class and participate more in solving example problems as they know it directly affects their grade.
What did students do with the cases presented? How were they used, in general?
Overall, students did well on exam questions that involved similar technical problems as the cases, though this was my first quarter teaching at DU, so I do not have a perfect control group to compare these outcomes to. Students also wrote enthusiastic comments about using cases and the associated active classroom on evaluations in both classes. Hence, the method appears to work, though the quantity of data is limited.
I did make a few rookie mistakes and noticed a few areas for improvement to the case study/active learning method. I will discuss three. First, I underestimated the importance of setting clear expectations, particularly with the Investments course that has younger students. I did have a couple of paragraphs in the syllabus about what good participation and case write-ups look like. Many students communicated well orally during the case discussion, but did not put the effort into explaining their problem solving process well in their write-ups. I had students treating cases more like a “homework assignment”, trying to find a “right answer”, but assuming I did not care as much about their explanation. Conversely, I cared much more about a carefully written explanation of how they went about solving the problem than a “right answer”. In the future I will and would suggest writing a precise grading rubric that relates letter grades to different qualities of the product. I might even make a sample case write-up myself to show them what an ‘A’ write-up looks like.
Second, grading participation was challenging and students would have benefited from regular feedback. Many students overestimated their contribution to class discussion and participation would have been even better if I corrected this misperception earlier. Next time, I will create a precise rubric for grading participation. Keeping track of many students’ comments is also challenging. I am not precisely sure what to do about this yet, but next time I will find a tool to help keep better track of student participation. One possibility is letting students turn in their feedback for any given day on a note-card. Another possibility is choosing a rotating set of students that I can realistically focus on in any given class and then carefully recording their participation after class.
Finally, any class will have a few students who have a stubborn desire to just show up, do the bare minimum, and hope for a C. I had the naïve idea that I would motivate every student to do ‘A’ work with really interesting cases and my enthusiasm. After a few tries and returned graded assignments, I did get some of the less motivated students significantly more engaged, however I did not get to them all. It was then easy to get discouraged by the few students that did not respond as favorably as I wanted than be encouraged by the outstanding majority of the class who were explicitly excited about the case and active learning approach. Hence, it is important to maintain your enthusiasm for the majority that respond favorably than lose it by being discouraged about the few that do not.