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 18 - Capital Budgeting II & Efficient Markets I |
This lecture presents applications of the NPV rule and project financing, as well as alternatives to NPV. Concepts presented include the profitability index, internal rate of return, and capital rationing. And the last 10-minute part of this video presents an overview of the theory of market efficiency and an example of the Space Shuttle Challenger disaster.
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