FIN 504: Financial Management
Lecture 12: Risk versus Return
Topics
What is Risk? Three Stage Analysis of Risk Two Classes of Risk Diversification Standard Deviation and Variance as Risk Measures
2
FIN 504: Financial Management
What is Risk?
Risk and Un
FIN 504: Financial Management
Lecture 11: A Capital Budgeting Problem
The Firm
The ABC Corporation is considering a new project that is expected to last five years. The firm is in the 38% marginal tax bracket. The project has a 17.5% required rate of retu
FIN 504: Financial Management
Lecture 10: Cash Flow Analysis
Topics
Two General Principles Factors in Cash Flow Analysis Capital Rationing Mutually Exclusive Projects
2
FIN 504: Financial Management
Two General Principles
Principle One: Use Increments.
Th
FIN 504: Financial Management
Lecture 9: Capital-Budgeting Decision Criteria
Topics
Decision Rules in Capital Budgeting The Decision Rules:
Payback Period Discounted Payback Period Net Present Value (NPV) Internal Rate of Return (IRR) Profitability In
FIN 504: Financial Management
Lecture 7: Bond Valuation
Bond Valuation
Bond Basics Bond Terminology Bond Ratings Valuing Bonds Technical Features of Bonds The Comparative Statics of Bonds
2
FIN 504: Financial Management
Bond Basics
Bond Basics
Form of
FIN 504: Financial Management
Lecture 6: Advanced Time Value of Money
Advanced TVM Problems
This class will focus on a series of time value of money problems that integrate the various techniques we have studied over the past five classes. We will focus o
FIN 504: Financial Management
Lecture 5: Rate Calculations
Rate Calculations
Percentages What is a Rate of Change Problem? A Cacophony of Names Types of Rate Calculations Rate Conversions Averaging Rates Real versus Nominal Values
2
FIN 504: Financial M
FIN 504: Financial Management
Lecture 4: Time Value of Money II
Time Value of Money II
Time Lines Annuities Perpetuities
2
FIN 504: Financial Management
Time Lines
The
0 C0
Use of Time Lines
1 C1 2 C2 3 C3 4 C4 5 C5 6 C6 T CT
Temporal
Indices:
t T 1,
FIN 504: Financial Management
Lecture 3: Time Value of Money I
Theory of the Time Value of Money
Why a Time Value? Components
Inflation (i) Opportunity Cost Risk
NOTE: I will use `cash flow' (C) as a general term to designate any flow of money positiv
FIN 504: Financial Management
Lecture 2: Statistical Review
The Use of Statistics
The Stochastic World Range of Financial Data Populations versus Samples Two Temporal Approaches to Measuring Financial Data
At One Time (Synchronic) Over a Period of Tim