The first step in the finance placement and waiver process is to take and pass the Introductory Finance Placement Exam (ACF qualifying exam). The exam is administered online and is a 2 hour exam. You are allowed to take the ACF qualifying exam ONLY ONCE. If you do not pass, you will not be allowed to take it again. You may use outside resources, but do not expect to have time to find resources during the exam. You should review prior to starting the qualifying exam (see the list of what the exam covers below). You are not allowed to discuss the exam contents with others before, during or after the exam. The Kellogg Honor Code applies. In particular, the exam must be solely your own work.

Students who want to take Acceprated Corporate Fniance (or at least preserve the option to take ACF), must pass the ACF Qualifying exam. There is no other option. Passing the ACF qualifying exam is also the first of two steps you must complete to waive our of Finance 1 entirely. Only students who pass the ACF qualfying exam may take the Finance 1 waiver.

To pass the Accelerated Corporate Finance waiver exam you should:

  1. Understand and know how to calculate present values. This includes both calculating the present value of a set of cash flows when the discount rate is given and calculating loan payments when the loan amount, maturity, and loan rate are given.
  2. Understand and know how to calculate the expected return and risk (variance or standard deviation) of the return on a portfolio given details of the portfolios components (e.g., how much is invested in different assets).
  3. Calculate returns on an investment (e.g., a bond) given prices and cash flows (e.g., interest payments).
  4. Understand the basic components of a balance sheet and be able to classify accounts as assets or liabilities and current or long term.
  5. Understand the interaction between the income statement and the balance sheet
Among students that have learned this material from prior work experience, from taking an undergraduate finance class, or from self-study, the pass rate has been high if they reviewed (or studied if the material is new). However, among students who did not review the material prior to beginning the exam, the pass rate has been low.

If you have any questions about this web page, please e-mail Professor Petersen