Lec 01: Introduction and What this Course Will Do for You and Your Purposes

Finance is about making purposes happen. It's fundamental to what we do and structure of our lives, cannot be avoided. It's about:

• technology for doing things,
• engineering with people
• getting capital or other resources in large scales, to build organizations to do things that happen in big scales,
• putting deals together and getting people incentivized do sth.,

Refs

Course

Eco.251: Financial Theory, by Prof. John Geanakkoplos

(more about math)

Book

Foundations of Financial Markets and Institutions, by Frank Fabozzi

Prerequisite

nothing but basics of economics

Purposes

build intuitions, know history

A question:

What if you have one thousand million dollars? (moral obligations, people like Carnegie)

Three people specially mentioned :

• David Swensen(eco 450)
• Maurice "Hank" Greenberg(founded AIG)
• Laura Cha

Contents

Lec 2: core concept of risk, financial crisis. concept of probability, concepts of independent risk, minimize risks through portfolio (actually not indpendent, so the crisis exists).

Lec 3: technology and invention in finance

Lec 4: portfolio diversification, how risks are spread, briefly about Captial Asset Pricing Model

Lec 5: insurance(don't have concepts until probability theory invented, about 1600s) (charity doesen't work on a big enough scale)

Lec 6: efficient markets

Lec 7: debt markets.(fundamental to the things we want to do in our lives)(e.g., borrow money to buy a house)

Lec 8: stock markets.(about motivation, to make some enterprises happen)

Lec 9: real estate

Lec 10: behavioral finance

Lec 11: behavioral finance

Lec 12: banking, multiple expansion of credit, the money multiplier, bank regulation,

Lec 13: forwards and future markets

Lec 14: options markets

Lec 15: monetary policy

Lec 16: investment banking(Dodd Frank?)

Lec 17: professional money managers

Lec 18: exchanges, brokers, dealers. clearinghouse

Lec 19: public and nonprofit finance

Lec 20: finding your purpose in finance(moral purpose)(a book called Richistan, by Robert Frank)