Foundations of Finance

Catalog description

This rigorous quantitative course introduces the structure of markets and the valuation of financial assets-including stocks, bonds, futures, forwards, options, and swaps. Principles of modern portfolio theory are developed to explain the concepts of risk- adjusted returns, beta risk measures, and efficient portfolio selection within a mean-variance framework. Fixed income analytics, including yield-to-maturity, duration, and forward rates, are applied to topics like the analysis of yield curves and bond arbitrage models. Illustrations in the course are drawn from both domestic and international financial markets. Although this is an introductory course, by the end students are expected to understand the underlying analytical framework for modern finance as well as to know how to apply basic valuation formulas to standard financial instruments.