Finance Theory and Investments

This course is an introduction to finance theory. Students are expected to bring the background of an introductory course in statistics, linear algebra, and optimization. The course covers in depth the fundamental equilibrium models of price formation in finance; namely, Markowitz’s mean-variance portfolio theory, capital asset pricing model, arbitrage pricing theory, and factors models. Other topics include models of bond prices, yields, and managing portfolio bonds. In addition to mastering the theoretical foundations, the course adopts a hands-on practical approach that matches the theory with practical applications that are routinely performed in the finance profession. In particular, students will learn how the portfolio management process (PMP) is performed in practice. In addition to using real data on financial assets (from Bloomberg, Thomson Reuters, and other sources), students will also learn how to analyze financial statements, perform fundamental and technical analysis, and how to construct financial portfolios. Prerequisites: MGMT 560 Corporate and International Finance