Objectives

The objective of this course is to provide a rigorous introduction to the fundamental principles of asset valuation and financing in competitive financial markets. The course is designed to provide the student with the tools that are necessary to analyze the financial issues presented in the elective courses. The course emphasizes three main ideas: the time-value of money, the benefits of diversification, and the hedging of risk.

Selected Topics

-Overview of financial markets
-Financial mathematics
-Bond valuation
-Forward and futures
-Options
-Valuation of cash flows
-Project evaluation/capital budgeting
-Asset pricing theory and risk management
-Performance evalation
-Capital Structure/Dividend Policy
-International finance/international project evaluation
-Real options in project evalation

William F. Sharpe, Gordon J. Alexander and Jeffery V. Bailey, Investments , (Prentice Hall, 1995), Richard Brealey and Stewart Myers, Principles of Corporate Finance , (McGraw Hill) Stephen Ross,, Randolph Westerfield and Jeffery Jaffe, Corporate Finance , (Richard D. Irwin).

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