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๐Ÿ“ˆ Finance

Sources: OpenStax (CC BY 4.0) · MIT OCW 15.401 (CC BY-NC-SA 4.0).

How money moves through time, how risk gets priced, and why markets sometimes get it wrong.

Risk (σ) Return (μ) T rf Efficient frontier and capital market line.
Chapter
1. Time Value of Money A dollar today is worth more than a dollar tomorrow. Present value, future value, discounting. ๐Ÿ“ˆ
2. Fixed Income Bonds, yield curves, duration, and why interest rates move prices. ๐Ÿ“ˆ
3. Equities Stock valuation: dividends, earnings, growth, and what a share price represents. ๐Ÿ“ˆ
4. Risk and Return Variance, standard deviation, Sharpe ratio: measuring what you get for what you risk. ๐Ÿ“ˆ
5. Portfolio Theory Markowitz: diversification is the only free lunch. Efficient frontier, optimal portfolios. ๐Ÿ“ˆ
6. CAPM and APT Systematic vs. idiosyncratic risk. Beta, the security market line, and arbitrage pricing. ๐Ÿ“ˆ
7. Forwards and Futures Locking in prices today for delivery tomorrow. No-arbitrage pricing, hedging. ๐Ÿ“ˆ
8. Options Calls, puts, payoff diagrams, put-call parity, and the Black-Scholes formula. ๐Ÿ“ˆ
9. Efficient Markets Prices reflect information. Weak, semi-strong, strong forms, and the anomalies that test them. ๐Ÿ“ˆ
10. Behavioral Finance When markets aren't efficient: biases, heuristics, bubbles, and limits to arbitrage. ๐Ÿ“ˆ
11. Capital Budgeting NPV, IRR, payback: how firms decide which projects to fund. ๐Ÿ“ˆ
12. Risk Management Value at risk, hedging strategies, and why tail risk matters. ๐Ÿ“ˆ

๐Ÿ“บ Video lectures: MIT 15.401: Finance Theory I (Andrew Lo) ยท Yale ECON 252: Financial Markets (Shiller)

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