Touchstones - Introductory Lecture The Touchstones of...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Introductory Lecture: The Touchstones of Finance • Purpose: Provide a framework for integrating the principles of finance into a conceptual whole Introductory Lecture: The Touchstones of Finance Purpose: Provide a framework for integrating the principles of finance into a conceptual whole Value Additivity Market Efficiency NPV Option Pricing Portfolio Theory
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
What is Finance? • Finance is the study of the market processes that allocate society’s savings to the most productive uses. • Finance is also concerned with how these market processes influence decision makers in business and government. • Much of this effort involves studying how security values are established in the marketplace What is Finance? The dimensions of this task can be appreciated through the following definition of a security given by the Supreme Court: [A security is] a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or third party. Key points: – Contract, transaction, or scheme – common enterprise – investor expects profits solely from other peoples’ efforts Other Peoples’ Money—Other Peoples’ Efforts
Background image of page 2
How Does the Market Value a Company? • A firm’s physical assets
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/15/2011 for the course FINA 5220 taught by Professor Staff during the Spring '08 term at North Texas.

Page1 / 6

Touchstones - Introductory Lecture The Touchstones of...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online