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Higher School of Economics

Theory of Finance

Higher School of Economics via Coursera

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Overview

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This course is part of HSE University Master of Business Analytics and Master of Finance degree programs. Learn more about the admission into the program and how your Coursera work can be leveraged if accepted into the program here https://inlnk.ru/bvD1E (Master of Business Analytics) and here https://inlnk.ru/WRM4O (Quantitative Finance)

Theory of Finance covers the basic principles and fundamental theories of pricing and valuation of various types of financial assets including stocks, bonds and derivatives. The content of the course corresponds to CFA Level 1.

Having successfully completed the course, students should be familiar with the most commonly used asset pricing models applied by academic researchers and financial market analysts in order to determine the fair values of various financial instruments. Students should also understand the key assumptions and restrictions of these models in order to apply them correctly especially at emerging capital markets as compared to developed ones. The main objective of the course is to develop basic economic analysis skills in finance for making reasonable investment decisions and conduct basic research in finance.

Syllabus

  • Introduction to Financial Markets. Essentials of Financial Calculations
    • In the first week, we will review financial instruments, financial markets, and financial systems. We will find out why we need to evaluate assets and how to evaluate assets. In addition, this week will address the concept of a perfect market and the law of one price, as well as the imperfection of the financial market.
  • Bond Pricing. Equity Pricing
    • In the second week, we will learn the basic approaches to valuing bonds and stocks. We will learn about the interest rate and credit risk on bonds, as well as about financial indicators related to shares.
  • Risk and Return. Portfolio Theory
    • In the third week, we will learn the main approaches to assessing the risk and return on financial assets. We will also learn the basic concepts of modern portfolio theory.
  • Capital Asset Pricing Model (CAPM)
    • In the fourth week, we will learn to understand the differences between approaches to determining the required rate of return based on different models. And also learn the main results of empirical tests of CAPM.
  • Final Project: Equity Valuation

Taught by

Pavel Malyshev

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