FM473A Finance I
Full FM473 Revision Guide that includes summaries of all lecture notes, tutorials, relevant readings and textbook chapters. It also include exam tips for the final paper. All summaries are arranged by topic. There are also some review questions that will help you understand the style of questions asked on this course.
Topics covered include:
- New Present Value: The goals of the firm.
- Interaction of firms and capital markets.
- Asset valuation with known cash flows.
- Bond valuation: Term structure of interest rates.
- Forward rates and loans.
- Stock valuation: The Gordon growth model and variants.
- The functioning of equity markets.
- Risk and return: What is risk?
- The portfolio frontier. Capital Asset Pricing Model (CAPM)
- What is the price of risk? The capital markets model.
- Alternatives to CAPM.
- Market efficiency Valuation of risk cash flows.
- Capital budgeting.
These notes are for financial analysis for students with a basic knowledge of management. The notes explores the way that firms and the capital market function to channel savings toward productive investments. From the investor’s perspective it considers characteristics of the major financial contracts and the principles used in their valuation. It considers how investors should select their portfolios and the implications of this behaviour for pricing assets in stock and bond markets. It explores the question of whether stock markets are efficient in reflecting investors information. It applies these insights to the firm’s financial management decision of whether or not to invest in a risky project and how to select among alternative investments.
There are 29 pages and over 10,000 words in these documents.