Introduction to Finance and Investment

Introduction to modern quantitative finance and investments. The course focuses on the basic principles underlying financial decision making which are applicable to all forms of investment: stocks, bonds, real estate, corporate finance, etc., and how they are applied in practice. Topics: interest rates; evaluating investments: present value and internal rate of return; fixed-income markets: bonds, yield, duration, portfolio immunization; term structure of interest rates; measuring risk: volatility, value at risk, expected shortfall; designing optimal security portfolios; the capital asset pricing model. Group projects involving financial market data. No prior knowledge of finance required. Hard prerequisites: MS&E 120 or 220, or CS 109, or STATS 116. MS&E 111 is strongly suggested. Working knowledge of Excel, or Python, or R, or Matlab, or Mathematica is also required.