Finance Theory I

MIT 15.401 · Prof. Andrew Lo

A rigorous introduction to modern financial analysis covering valuation, risk, portfolio theory, CAPM, and corporate finance applications, the bedrock of all financial decision-making.

8 Modules

Self-Paced

Certificate

Graduate Level

What You'll Learn

Time value of money: present value, future value, and annuity formulas
Fixed income: bond pricing, yield to maturity, and duration
Equity valuation: dividend discount models and earnings multiples
Portfolio theory: expected return, variance, and covariance
Mean-variance optimization and the efficient frontier
Capital Asset Pricing Model (CAPM) and the security market line
Market efficiency: weak, semi-strong, and strong forms
Forward and futures contracts: pricing and hedging applications
Options: calls, puts, put-call parity, and Black-Scholes intuition
Capital budgeting: NPV, IRR, payback period, and real options

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Academic Attribution

Adapted from MIT OCW 15.401 Finance Theory I (Fall 2008). Instructor: Prof. Andrew Lo. MIT Sloan School of Management.

CC BY-NC-SA 4.0

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