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Introduction

Introduction. Stock market is a slough of fear and greed untethered to corporate realities – Warren Buffet. Plan for today. What is finance? Typical financial problems / myths Financial institutions Markets / instruments / intermediaries Asset pricing / project evaluation

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Introduction

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Presentation Transcript

  1. Introduction Stock market is a slough of fear and greed untethered to corporate realities – Warren Buffet

  2. Plan for today • What is finance? • Typical financial problems / myths • Financial institutions • Markets / instruments / intermediaries • Asset pricing / project evaluation • Time vs risk dimension • Further topics / courses • Corporate finance • Econometrics of financial markets • Risk management FF 2005/06

  3. What is finance? • Real vs financial investments • Management of risks • Intertemporal vs cross-sectional • Asset pricing • Portfolio management • Performance evaluation • Financial engineering FF 2005/06

  4. Typical issues / myths • Mutual fund X has the highest annual return. Does X have the best portfolio manager? • Speculators bring excessive volatility to stock markets. Should we limit speculation? • How to support local financial market? Russian companies should make IPO at home, pension funds should not invest abroad • Central Bank’s reserves are mostly invested in foreign government bonds • Russia’s stabilization fund has accumulated more than $15 bln. Why not invest in domestic projects? FF 2005/06

  5. Financial institutions • Basic questions • Existence • History • Evolution • Convergence • Financial markets • Financial instruments • Financial intermediaries FF 2005/06

  6. Financial markets • Investors vs borrowers • Listing requirements • Depositary receipts • Counterparty risk • Information transparency and insiders FF 2005/06

  7. Financial instruments • Cash flow vs control rights • First vs second level • Indices FF 2005/06

  8. Financial intermediaries • Private vs institutional investors • Solving agency problem • Asset transformation FF 2005/06

  9. Asset pricing • Time dimension: analysis under certainty • Fixed income • Capital budgeting • Cross (risk) dimension: analysis under uncertainty • States of nature • Arbitrage pricing FF 2005/06

  10. Asset pricing (2) • Portfolio optimization • Diversification • Selectivity vs timing • Equilibrium models • Risk factors: expected returns vs volatility FF 2005/06

  11. Further topics • Corporate finance • Capital structure • IPO, M&A • Corporate governance • Econometrics of financial markets • Market efficiency • Risk management • Market vs credit risk • Behavioral finance • Law and finance FF 2005/06

  12. Conclusions Если вам показалось, что я выразился слишком ясно, вы, должно быть, неверно меня поняли

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