Course Page

Finance

Course Number:

70391


Faculty

Christopher Telmer, telmerc@andrew.cmu.edu


James Albertus, jalbert1@andrew.cmu.edu


Program

Undergraduate Business


Concentrations

Finance


Course Description

Firms create value by making good investment decisions. Finance is the field of management science tasked with making this happen. It is a set of tools with which firms identify good investments and decide how to pay for them. Paying for them ultimately involves getting money from households. Therefore, finance also describes the investment decisions of households and the resulting allocation of the economy's resources across firms and time. This course is the introductory finance course in the undergraduate business program. The main topics covered in the course are Financial Markets, Net Present Value, The Objective of the Firm, Discounted Cash Flow, Portfolio Theory and the Cost of Capital, The Efficient Markets Hypothesis, The Capital Structure of the Firm, and Business Valuation. Time permitting, the course will also provide an introduction to option markets and derivative securities. Upon completing the course a student will be able to consider a large and complex business problem, make some assumptions, structure the firms' cash flows in a spreadsheet, calculate the value of different solutions to the problem, and make a decision. Prerequisites: 73-100 and 70-207 (or its equivalents -- 36-201, 225, or 217).

Format

Lecture: 160min/wk


Pre-requisites

None