Dr. Stephen Larson, Dr. Hyuna Park (center), and Dr. Darshana Palkar are the newest members of the Department of Finance. According to College of Business Dean Scott Johnson, all three combine strong research skills with enthusiasm for their discipline.
Given its fundamental role in the key decisions facing business leaders, finance is an essential topic in the modern business curriculum. Because it is also inherently quantitative, many students approach the topic with the expectation it will be difficult. For the faculty who teach finance courses, making the subject matter seem accessible to anxious students may be the most challenging part of the job.
Three recent additions to the faculty in the Department of Finance were hired precisely because of their ability to present topics such as hedge funds, financial leverage, adverse selection costs, and seasoned equity offerings in ways that resonate with students. According to College of Business Dean Scott Johnson, all three strengthen the department by combining strong research skills with enthusiasm for their discipline. "They are all intellectually curious," says Dean Johnson, "and that carries over into their teaching."
Dr. Hyuna Park's enthusiasm for her research on the factors that affect the risk associated with hedge funds is apparent from the moment she begins to speak about the topic. Despite their recent prominence in the investment world, hedge funds are largely a mystery to the general public. In fact, New York magazine recently devoted an entire issue to helping the average American understand these investments. One gets the sense that a few class sessions with Dr. Park would clear up any confusion.
While her own research uses sophisticated methods of assessing how factors such as expected shortfall explain the relationship between risk and return on investment, Dr. Park stresses the importance of learning the basics in her classes. She begins each course by showing her students an image of a tree, emphasizing the importance of the roots. When students start with the leaves—or details—says Dr. Park, they may get lost. "A new discipline requires a base knowledge. You add the details as you proceed."
Her own understanding of financial principles is supported by her background in mathematics and engineering. Initially, she found it surprising that the tools she learned in engineering could be used to analyze the finance industry. But, she says, "The fundamental tools are very similar." Her mastery of these tools was evident when she presented her research at the annual meeting of the Financial Management Association in Orlando, Florida last year. There, she received positive feedback that she hopes will lead to a published article.
Dr. Darshana Palkar's strategic financial management courses are enriched by her research on capital structure theories, trading volume, and seasoned equity offerings.
Publication is also on the mind of Dr. Darshana Palkar, who joined the Department of Finance in 2006. She is already building a research program around her dissertation—which is an empirical investigation of the relative importance of trade off and pecking order theories in capital structure determination—and is preparing the manuscripts for journal submission. Both Dr. Park and Dr. Palkar chose Minnesota State Mankato, in part, because of the support for faculty research. "I saw that there is a lot of potential for research–related activities here," says Dr. Palkar. "There is an opportunity to pursue our own interests in ways that contribute to the goals of the finance department."
One of the department's goals is meeting the growing need for Certified Financial Planners—something Dr. Stephen Larson was hired to do last year. After working in industry and teaching at Eastern Illinois University, he joined Minnesota State Mankato as the Director of the Financial Planning Certificate (CFP) program in the Twin Cities, where he has continued the program's successful record of preparing students for the CFP exam. While the national pass rate for the CFP exam in July 2007 was 51%, the pass rate for graduates of the Minnesota State Mankato CFP program was 80%. "We're usually at least 15% above average," says Dr. Larson.
Dr. Stephen Larson's research interests include night trading, futures prices, and the process of choosing a financial planner.
According to Dr. Larson, the need for qualified finance professionals has intensified because baby boomers are approaching retirement. While most Americans could benefit from a crash course in money management, older adults are especially in need of sound financial advice given their limited incomes, concerns about health and life insurance, and the need to protect family assets from long–term healthcare costs. Analyzing the characteristics people look for when choosing a financial planner is one of Dr. Larson's research interests and it informs his pedagogical approach to the CFP program. His research on night trading recently earned him a publication in Financial Review.
All three of the finance department's newest members look for ways to infuse their research into their courses. In addition to making the material more interesting and accessible to students, Dr. Larson has found that involving students in research often gives him a fresh perspective on the topic. "When students are new to the material," says Dr. Larson, "they see things in a different light."
