Week 1 - Introduction-2

Week 1 - Introduction-2 - Finance 310 Prof. Gamble...

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Finance 310 Prof. Gamble INTRODUCTION Goals: Understand the overall structure of the firm and how finance fits into it. Be able to give examples of financial decisions faced by both individuals and firms. Know the goal of the firm. Be able to describe the incentive problems and how ethical conflicts arise. Reading: Chapter 1 -“Financial Economics” What is Finance? Finance - a. (boring definition) the study of how people allocate scare resources over time b. (my definition) how to make smart decisions about money From economics you know simple cost-benefit analysis--make decisions for which benefits exceed costs. Financial decisions are complicated by benefits and costs occurring at different points in time and future benefits and costs are not often known with certainty . Examples: Why Study Finance? In this course you will learn tools for making smart financial decisions and along the way learn a lot about how the financial system works. "A fool and his money are soon parted." Thomas Tusser (1524-1580), English poet and farmer
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Week 1 - Introduction-2 - Finance 310 Prof. Gamble...

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