4 credit hours
Financial markets are places where suppliers of capital (‘investors’) and consumers of capital (‘firms’) meet and trade. The first part of this course examines the techniques that both investors and firms use to deal with cash flows that occur at different points in time; we look at valuation problems across several types of capital markets.
The second part of this course introduces the concepts of risk and uncertainty, which are central to an understanding of finance. We introduce a measure of risk, and develop a model of how this risk measure corresponds to a level of expected return on an asset or project. We integrate this model of risk and return with the valuation of cash flows through time, and consider the evidence on how prices in financial markets are related to value.
Finally, we introduce options, discuss how they are valued, and consider applications of option valuation.
Course objectives are to provide students with a good grounding in basic concepts of finance; to establish a “finance mindset” that views finance as applied microeconomics in a business context, with value creation as a central concept; to develop skills in financial analysis, planning and decision-making; and to develop an appreciation for decision-making in a complex world.
Watch the below video for a brief introduction to the Introductory Finance course:
This next video provides a sample of what content is covered in the Introductory Finance course:
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