15.401 Finance Theory I
15.401 Finance Theory I (Fall 2008, MIT OCW). Taught by Professor Andrew Lo, this course provides a rigorous introduction to the fundamentals of modern financial analysis and applications to business challenges in valuation, risk analysis, corporate investment decisions, and basic security analysis and investment management. The four major sections of the course are: (A) an introduction to the financial system, the financial challenges firms and households face, and the principles of modern finance in tackling these challenges; (B) valuation of stocks, bonds, forwards, futures, and options; (C) methods for incorporating risk analysis into valuation models, including portfolio theory, mean-variance optimization, and the Capital Asset Pricing Model; and (D) applications to corporate financial decisions, including capital budgeting and real options. (from ocw.mit.edu)
| Lecture 04 - Present Value Relations III & Fixed-Income Securities I |
This lecture starts with a discussion of leverage ratio with an example from Lehman Brothers. The video lecture then continues to cover the last portion of present value relations, including inflation and how to calculate real and nominal rate of return. And the last 30-minute part of this video introduces fixed-income securities along with examples of securities and market participants, and an industry overview. Trading frequency and the framework for valuation are presented by use of an example involving a coupon bond.
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