|This course offers the financial theory and quantitative analytical tools necessary for understanding how stock, bond, and option prices are determined, and provides the skills required to make sound investment decisions. The course combines a theoretical framework with applied analysis. Topics covered include: portfolio selection based on mean-variance analysis, models of risk and return (including the CAPM and multifactor models), performance evaluation of mutual funds and hedge funds, market efficiency and the random walk hypothesis, asset pricing anomalies and behavioral finance, derivative security pricing (including options, futures, forwards, and swaps), and the term structure of interest rates.|
|The main texts used for the course are Bodie, Kane, and Marcus, Investments; and Grinblatt and Titman, Financial Markets and Corporate Strategy. A CoursePack will also be designed containing supplemental readings, cases, and articles.|
|Based on 5-6 homework assignments, a case write-up and discussion, a mid-term, and a final. Class participation will also play a role. No pass/fail grades. No auditors.|
|Business 30000, 33001, and 41000 or 41100. Students must be comfortable with statistics, linear and matrix algebra, calculus, and microeconomics at the level of the above
courses. Familiarity with a spreadsheet package such as Excel is vital.
Description and/or course criteria last updated: 06/12
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