Lecture 1. Financial Instruments and Markets (I)
Readings:
*Bodie, Kane & Marcus, Chapter 2
*Mishkin, "The Economics of Money, Banking and Financial Markets", Chapter 3.
Lecture 2. Financial Instruments and Markets (II)
Readings:
*Bodie, Kane & Marcus, Chapter 2
*Mishkin, "The Economics of Money, Banking and Financial Markets", Chapter 3.
Lecture 3. Financial institutions
Readings:
*Bodie, Kane & Marcus, Chapter 2
*Mishkin, "The Economics of Money, Banking and Financial Markets", Chapter 3
Assignment 1 distributed.
The course starts with fundamental topics of financial instruments, markets and institutions and the introduction of discounted cash flow. Next, the second part of the course will focus on fundamental finance which is portfolio theory, including risk and returns, risk diversification, capital market equilibrium, and efficient market theory. In the third part, students will analyze debt instruments, including government bonds, corporate bonds and bond portfolio management.
The fourth part requires students to apply the knowledge of the Introduction to Financial Accounting course in the Fall semester and the previous parts to corporate finance analysis. In particular, students will be familiarized with capital structure theory, stock analysis based on technical analysis as well as fundamental financial analysis and corporate valuation practices based on free cash flow. The last part of the course will be risk analysis and financial derivative instruments. Students will practice risk analysis using Monte Carlo simulation, acquaint themselves with valuation concepts and principles of future contracts, options, and learn how to use these tools in risk management.
