Students with prior knowledge of finance can begin with more advanced finance classes if they pass the appropriate exams. The placement and waiver exams are the only way to pass out of a finance class and thus satisfy the prerequisite requirements for more advanced finance classes. No exceptions. Additional information on the placement and waiver process (for 2Y students) was sent to you by the office of student affairs and is also available on the finance department web pages. Additional instructions (academic to do list) and due dates for 2Y students are available from the office of student affairs online. PTMBA students should contact the Chicago office to ask about exam schedules and logistics. The following are your options for starting the finance curriculum. Almost all students register for Finance 1 or Accelerated Corporate Finance.
Finance 1 [FINC430]. Students may register for this class without taking or passing any finance waiver exams.
Accelerated Corporate Finance [FINC440]. To register for ACF, you must take and pass the online Introductory Finance Placement Exam. The exam covers the basic mechanics of finance that are taught in Finance 1, but assumed in ACF. Students most likely to pass the exam are those who have previously studied finance, worked in finance before, or spent time teaching themselves the mechanics. Before starting the exam, be sure to review the topics. Historically, students who have not reviewed, even though they have seen the concepts before, do not always pass. The exam is an online exam and administered through Canvas website (Kellogg's educational portal). The questions are numerical or mulitple choice. You may attempt the exam only once.
Waive Finance 1. To waive Finance 1, you must first pass the ACF Qualifying Exam. Only students who successfully pass the ACF Qualifying Exam to sit for the Finance 1 waiver exam. The Finance 1 waiver exam covers the logic and intuition of valuation (e.g. Finance 1 topics). The list of topics covered is available online. Since this exam is conceptual, not numeric, it is significantly more difficult than the ACF qualifying exam. Historically, students who have not studied finance at the graduate level have a low pass rate. Students who pass the Finance 1 Waiver Exam may register for Finance 2 or other advanced finance courses which have only Finance 1 (FINC430) as a prerequisite.
Waive Finance 2. To take the Finance 2 waiver exam, you must first pass the Finance 1 waiver exam. Only students who successfully pass the Finance Waiver Exam may take the Finance 2 waiver. The Finance 2 waiver exam covers the logic and intuition of capital structure and payout policy (e.g. Finance 2 topics). The list of topics covered is available online. Since this exam is conceptual, not numeric, it is significally more difficult than the ACF Qualifying exam. Historically, students who have not studied finance at the graduate level have a low pass rate. Students who pass the Finance 2 Waiver may register for any advanced finance courses which have Finance 2 (FINC431) as a prerequisite. The prerequisite will list FINC431 (Finance 2) or FINC440 (Accelerated Corporate Finance) since successfully completing either class means you have learned the material in Finance 1 and Finance 2.
If you find pictures easier to understand, this is a roadmap of the waiver process and which exams you must take and pass to waiver into ACF or waiver out of Finance 1 or Finance 2.
Planning Ahead: A Key to Success
To get the most out of your Kellogg educational experience, it is crucial that you plan ahead. Most of the advanced finance classes which you want to take have prerequisites. These prerequisites can only be satisfied by successfully passing the class or by passing the waiver exam. Thus you should plan ahead and be sure you have the required courses completed in time to take the advanced courses.
Some of the advanced finance courses are offered only once a year. Thus, it is worth thinking about which of these classes you are interested in taking, when they are offered, and what the prerequisites are. I recommend sketching out the classes you are considering each quarter you are here. This plan will change as you take courses and possibly change you educational and career trajectory. However, if you do this you are less likely to miss a class that you want to take or that you need for your career.
If you have additional content questions about the waiver process, you should feel free to contact me. My contact information is on the last page. Logistics questions (when and where), should be directed to the office of student affairs on your campus (e.g. Evanston or Chicago).