|
Lecture:Date |
Topic |
Text Chapters and Lecture notes |
Other Readings |
|
1:
3/31 |
Course mechanics, overview.
Discussion of the investment project.
Introduction to Fisher
model
|
BM Ch.1 and 29
[BM
Ch.
29 covers some basic accounting ideas that we will need.]
EZ:
powerpoint slides |
Alexander, & Bailey 13.3.1-13.3.3
Hirshleifer& Hirshleifer,
14.1-14.2 |
|
2:
4/2 |
Intertemporal allocation, Fisher's exchange model. Present value, the
role of financial markets. |
BM Ch.
2
EZ:
powerpoint slides
EZ:
tablet pc notes
|
Varian, Ch.10
Hirshleifer& Hirshleifer,
14.1-14.2 |
|
3-4:
4/7 - 4/9 |
Intertemporal allocation, Fisher's model with production and exchange.
The Fisher separation theorem. Determinants of the level of real
interest rates.
Inflation and interest rates.
Start
Present value calculations. |
BM Ch.
2
EZ:
tablet pc notes
EZ:
tablet pc notes |
Varian, Ch.10
Hirshleifer& Hirshleifer,
14.3-14.7 |
|
5: 4/14 |
Present value calculations. |
BM Ch. 3
EZ:
tablet pc notes. |
|
|
6: 4/16 |
Valuation of bonds. Interest fluctuations and bond prices. |
BM Ch. 4, sections 1-2,
24 (skim)
EZ:
tablet PC notes |
|
|
7: 4/21 |
Arbitrage
The
term structure of interest rates.
Discussion of
investment project |
BM Ch. 4, section 3-5
EZ:
tablet PC notes
|
|
|
8: 4/23 |
Valuation of stock. Dividends, earnings, interest rates, and stock
prices. |
BM Ch. 5
EZ:
tablet PC notes |
|
|
9: 4/28 |
Investment decisions. Net present value rule and applications.
Internal rate and its problems.
Further applications of net present value. |
BM Ch. 6,7
EZ:
tablet PC notes |
|
|
10: 4/30 |
Investment decisions. Net present value rule and applications.
Internal rate and its problems.
Further applications of net present value. |
|
|
|
11: 5/5 |
Midterm Exam
Midterm
Solutions
Investment Project Assignment 1 Due.
|
Closed book and closed note exam. I will allow one page (double-sided)
of notes.
Bring blue/green book and calculator |
Haley & Schall,
Ch.4 |
|
12: 5/7 |
Review: Random variables, distributions, expected values, variance,
covariance.
Decision making under uncertainty.
The
expected utility hypothesis |
Download RV Review and do the problems:
rvrewiew.pdf (problems),
rvkey.pdf (solutions)
BM Ch. 8, sections 1-3.
EZ:
tablet PC notes |
Varian, Ch.12
Pyndick and Rubinfeld, Ch 5 |
|
13: 5/12 |
Introduction to risk and return.
Expected return and variance of
return for assets and for groups of assets.
|
BM Ch. 8
EZ:
tablet PC notes |
Varian, Ch.12
Pyndick and
Rubinfeld, Ch 5 |
|
14: 5/19 |
Portfolio analysis and the effects of diversification. Individual
investor optimum. |
BM
Ch. 9, sections 1-2.
EZ:
tablet PC notes |
|
|
15:
5/21 |
Capital market equilibrium and the CAPM. Measurement of betas.
Applications of CAPM to capital budgeting, etc. |
BM Ch. 9, sections 3-4.
BM Ch. 10 (skim)
EZ:
tablet PC notes.
|
|
|
16:
5/28 |
Efficient capital markets, definition, implications. |
BM Ch. 14 |
|
|
17:
6/2 |
Introduction
to Options |
BM Ch. 21 |
|
|
18:
6/4 |
Valuing options: binomial pricing and Black-Scholes. |
BM Ch. 22 |
|
|
Final Exam: Tuesday 6/10
8:30 - 10:20 CDH 135 |
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