We study the principles of investment. The key components of the course include portfolio theory and the application of risk and return concepts to portfolio construction. We look at equilibrium in equity markets, this includes the CAPM as a theory of asset pricing. This leads us to the study of the market model and multifactor models of security returns. Valuation of various types of securities, including fixed income securities, the term structure of interest rates and the management of bond portfolios through the use of duration are also addressed. The valuation of equity securities is briefly covered. We then look at the practical applications of portfolio theory and study portfolio evaluation and management. We will spend some time studying the valuation of options.
- Teacher: Thang Nguyen