The coursepack is comprised of documents covering material not covered in the textbook, assigned numbers corresponding to the week to which they pertain. There will be a number of exercises and problems in these coursepack chapters. Students should do all of them. Solutions are provided at the ends of the chapters. Students should be certain to understand all relevant readings in the Coursepack chapters and be able to work through all relevant exercises.
Students requiring review in mathematics or elementary finance
should do so before the third week of the term (this is important).
Comfort with all of the material in the
Elementary Mathematics Review will be essential to this course. In
addition, comfort with material covered in an introductory finance
course will be useful for keeping up with the course. A separate page
for exam preparation may also prove quite
useful before exams. There are links to
sample exams as well. Feel free to report any difficulties to or
obtain any needed assistance from
John Teall.
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Week
4. Modern
Portfolio
Theory
1. Elementary Portfolio Arithmetic 2. The Efficient Set 3. The Capital Asset Pricing Model 4. Mathematics Underlying Arbitrage Pricing Theory 5. Deriving the APT Model 6. Index Models and Applications of APT Week 7. Valuation 1. Introduction to Common Stock Analysis 2. Introduction to Fundamental Analysis 3. Growth Models 4. Setting the Discount Rate 5. Financial Statement Analysis: An Introduction 6. Ratio Analysis and Risk 7. Misreading and Misreading Financial Statements 8. Comparables-Based Valuation Week 9. Options (Almost the same as in the textbook, but not scattered about in different chapters. Nothing new.) 1. . Calls and Puts 2. Derivative Securities Markets and Hedging 3. Put-Call Parity 4. Options and Hedging in a Binomial Environment 5. A Primer on Black-Scholes Pricing 6. Estimating Implied Variances Week
11. Decision Making under
Uncertainty (This optional reading, is a bit more
formal and technical for economics students, is
not needed for exam purposes.)
A. Expected Utility B. Risk Aversion, Large Risks and Insurance C. Risk Aversion, Small Risks and Insurance D. Risk Aversion and Portfolio Allocation E. Insurance and Co-Insurance F. Stochastic Dominance G. The Allais Paradox and the Ellsberg Paradox |
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