FINA 6A35
Lecture 3 9/8/2015
Homework 1 is due
Interest rates (BDM, 5.1-5.3)
EAR, APR, Amortizing loans
Nominal and Real interest rates
The Yield Curve
Applications
These notes should be used by enrolled students only.
May not be copied, duplicated,
4. More on annuities Aa Aa
An ordinary annuity sells for $169,504.23 and promises to make equal payments at the ends of each of the next 20
years. If the annuity's appropriate interest rate is 7%, what is the value of the annual annuity payment?
0 $17,0
FINA 6A35
Lecture 7 10/6/2015
Homework 5 is due
Pricing Risk
(BDM, Chapter 10; Chapter 12.1-12.3)
Common Measures of Risk and Return
Historical Returns of Stocks and Bonds
The Trade-Off Between Risk and Return
Systematic vs. Idiosyncratic Risk
Dive
FINA 6A35
Lecture 4 9/15/2015
Homework 2 is due
Finish discussion of Interest Rates (BDM, Chapter 5.1-5.3)
Basics of Bond Valuation
(BDM, Chapter 6.1-6.2; 6.4 ; Chapter 8, 2nd ed.)
Type of bonds; terminology
Bond prices & Yield to Maturity (YTM)
Int
Finance Careers & Course
Plans
Department of Finance
C. T. Bauer College of Business
Career Prep = General + Specialties
Corporate Finance Investment Banking, M&A,
Consulting, Capital Planning, Project Management,
Investor Relations
Investments Investmen
FINA 6A35
Lecture 1 8/25/2015
Welcome to Managerial Finance!
Syllabus & Class Schedule
Introduction to the course
Time Value of Money (BDM, Chapter 3.3, 3.4)
These notes should be used by enrolled students only.
May not be copied, duplicated, or posted
Managerial Finance Lecture 1
(Ch. 3.1-3.3)
CHAPTER 3: INTRO
Law of One Price:
o The absence of arbitrage
o We can use market prices to determine the value of an investment opportunity to the
firm
Arbitrage and Financial Decision Making
o Concept: A decisi
Managerial Finance Lecture 2
(Ch. 4)
CHAPTER 4: The Time Value of Money
Cash flows in Financial investments involving more than one future period
Tools for calculating NPV lasting several periods:
o Timeline: Visual method for representing a stream of cas
1a)
1b)
Cash = $5000
Choose the stock option because it is more valuable
Stock =$6300
I need to know Time Value of Money (Interest) and Risk
2a)
2b)
2c)
$208
$192.31
$200 today
3a)
3b)
NPV = $3,636,363.36
Borrow $18,181,818.18 today
4)
$3,152.50
5)
NPV =