Description

In this course we will analyze the structure and workings of financial markets. We will begin by studying the organization of markets from a broad perspective and then will learn the mathematics and models for valuation of specific asset classes. Topics will include risk-return trade-off, portfolio optimization, factor pricing models, fixed income securities, equity securities, and derivatives. The goal of the class is to give students a solid foundation of how financial assets are priced in the marketplace, and what questions investors should ask (both of themselves and their financial advisors) prior to making investment decisions.

Course Materials

There is no required textbook for this course. A useful reference would be either Essentials of Investments or Investments, but there is no need to purchase either of these texts. All course material will be made available via this website in the form of lecture notes and other free references on the internet (such as Investopedia).

Assignments

There will be six assignments, assigned most Thursdays and due one week later. All assignments will be completed online using Accepi. This service costs $9.95 for the quarter, but the expense is more than offset by the fact that I am not requiring you to purchase a textbook.

Exams

There will be two exams:

Miderm: Thursday, 7 Feb 2019, in class.
Final: Thursday, 21 Mar 2019, 8:00 am - 11:00 am

There will be no make-up exams - it is your responsibility to arrange your schedule to be present for the exams.

Grading

Assignments: 25%; Mid-Term Exam: 35%; Final Exam: 40%. I will curve grades only at the end of the semester if the distribution is low enough and/or spread out enough. It is important for me to emphasize that curving will never hurt your grade - it will only work to your advantage.

Topics

Probability
Asset Classes and Financial Instruments
Securities Markets
Risk and Return
Efficient Diversification
CAPM
Bonds and Yields
Derivatives