How to Use the Course Slides

This course uses an online presentation format. The following link explains how to use the slides.

Slides How To

Chapter 1 - Risk and Returns

Calculating returns using different methods; understanding the historical relationship between risk and return; basic statistics

Risk and Returns Slides

Chapter 2 - The Investment Process

Defining the investor policy statement; understanding the many broker/advisor options; executing trades using margin; shorting stocks

Investment Process Slides

Chapter 3 - Overview of Security Types

A brief overview of interest-bearing assets, equities, and derivatives. Future lectures and chapters will be dedicated to each one of these topics.

Security Types Slides

Chapter 4 - Mutual Funds and Other Investment Companies

A discussion of mutual funds, their strategies, and their fees. Hedge funds and exchange traded funds are also discussed.

Funds Slides

Chapter 5 - The Stock Market

The functioning of the equity market, calculating index returns with different weighting schemes, and the various trade types available to investors.

Stock Market Slides

Chapter 6 - Common Stock Valuation

Methods for estimating the value of a firm's common stock. Discounted cash flows, dividend discount model, free cash flow model, residual income model, etc.

Excel File 1 Excel File 2 Excel File 3

Derivatives / Forwards

A brief overview and definition of derivatives. Forward contracts: an introduction to the structure, attributes, and payoffs of forward contracts.

Derivatives Slides (short) Forward Contract Slides

Futures

A summary of the differences between futures contracts and forward contracts, as well as the process of daily settlement. Hedging using futures. Arbitrage and the pricing of futures contracts in a no-arbitrage setting.

Futures 1 Slides Futures 2 Slides

Options

An overview of the types of options as well as their payoff and profit curves. Option premium decomposition and "moneyness". The relationship between the premium and strike prices and time to expiration. Option strategies.

Options 1 Slides Options 2 Slides Option Strategies (Excel file)

Interest Rates

An overview of interest rates, money market and fixed income securities, rate quotes, and inflation adjustments.

Interest Rates Slides

Bonds

Basic bond concepts and pricing, including flat and full prices. Risks associated with investing in bonds.

Bonds Slides