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 13 - Risk and Return II & Portfolio Theory I |
This lecture covers empirical properties of stocks and bonds, patterns of returns, and statistical measures of risk of a security. At the very end, stock market anomalies such as the size effect, the value premium, and momentum are presented. And the last 33-minute part of this video introduces the portfolio as a combination of securities and offers guidelines for what constitutes a good portfolio. With regard to measuring risk and reward, a number of assumptions are set forth for the remainder of the course. A brief introduction to mean-variance analysis is presented.
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