Finance Courses for Academic year 2013-14Expand all

Courses
Course #

Description: Core theory of modern financial economics and financial management, concentrating on capital markets and investments. Topics include functions of capital markets and financial intermediaries, asset valuation, fixed income securities, common stocks, capital budgeting, diversification and portfolio selection, equilibrium pricing of risky assets, the theory of efficient markets, and an introduction to derivatives. Students taking graduate version complete additional assignments.

Professor(s) who recently taught this course:

  • Jean-Noel Barrot
  • Andrew Lo
  • Erik Loualiche
  • Adrien Verdelhan
  • Haoxiang Zhu
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Description: Continuation of 15.401, concentrating on corporate financial management. Topics include capital budgeting, investment decisions and valuation; working capital management, security issues; dividend policy; optimal capital structure; and real options analysis. Students taking graduate version complete additional assignments.

Professor(s) who recently taught this course:

  • Paul Asquith
  • Rajkamal Iyer
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Description: Seminar exposes students to some of the basic institutions and practices of the financial industry. Includes panel discussions with representatives from leading financial institutions, MIT alumni currently engaged in the financial services sector, and leading industry vendors. Restricted to first-year Finance track MBA students.

Professor(s) who recently taught this course:

  • John Parsons
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Description: Core theory of modern financial economics and financial management, concentrating on capital markets and investments. Topics include functions of capital markets and financial intermediaries, asset valuation, fixed income securities, common stocks, capital budgeting, diversification and portfolio selection, equilibrium pricing of risky assets, the theory of efficient markets, and an introduction to derivatives. Students taking graduate version complete additional assignments.

Professor(s) who recently taught this course:

  • Jean-Noel Barrot
  • Erik Loualiche
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Description: Continuation of 15.411, concentrating on corporate financial management. Topics include capital budgeting, investment decisions and valuation; working capital management, security issues; dividend policy; optimal capital structure; and real options analysis. Students taking graduate version complete additional assignments.

Professor(s) who recently taught this course:

  • Rajkamal Iyer
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Description: Provides a rigorous introduction to the fundamentals of modern financial analysis and applications to business challenges in capital budgeting, project evaluation, corporate investment and financing decisions, and basic security analysis and investment management. Focuses on five key sections: an introduction to the financial system, the unifying principles of modern finance, and fundamental present-value relations; valuation models for both stocks and bonds and capital budgeting; methods for incorporating uncertainty into valuation models; valuation of derivative securities; and applications to corporate financial decisions. Restricted to MIT Sloan Fellows in Innovation and Global Leadership.

Professor(s) who recently taught this course:

  • Deborah Lucas
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Description: Core theory of capital markets and corporate finance. Topics include functions and operations of capital markets, analysis of consumption-investment decisions of investors, valuation theory, financial securities, risk analysis, portfolio theory, pricing models of risky assets, theory of efficient markets, as well as investment, financing and risk management decisions of firms. Provides a theoretical foundation of finance and its applications. Restricted to students in the Master of Finance Program.

Professor(s) who recently taught this course:

  • Leonid Kogan
  • Jiang Wang
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Description: Foundations of modern financial economics; individuals' consumption and portfolio decisions under uncertainty; valuation of financial securities. Topics include expected utility theory; stochastic dominance; mutual fund separation; portfolio frontiers; capital asset pricing model; arbitrage pricing theory; Arrow-Debreu economies; consumption and portfolio decisions; consumption beta models; spanning; options; market imperfections; no-trade theorems; rational expectations; financial signaling. Primarily for doctoral students in accounting, economics, and finance.

Professor(s) who recently taught this course:

  • Stephen Ross
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Description: Concepts and techniques for analyzing financial decisions in commercial property development and investment. Topics include property income streams, urban economics, discounted cash flow, equity valuation, leverage and income tax considerations, development projects, and joint ventures.

Professor(s) who recently taught this course:

  • David Geltner
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Description: Introduces real estate capital markets for institutional investors. Topics include real estate investment trusts (REIT), commercial mortgage-backed securities (CMBS), and private equity. Concepts and techniques for investment analysis include portfolio theory and equilibrium asset pricing. Additional topics may include price indexing and derivatives.

Professor(s) who recently taught this course:

  • David Geltner
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Description: Investigates the economics and finance of securitization, a practice that allows illiquid assets to be transformed into more liquid securities. Considers the basic mechanics of structuring deals for various asset-backed securities. Investigates the pricing of pooled assets, using Monte Carlo and other option pricing techniques, as well as various trading strategies used in these markets.

Professor(s) who recently taught this course:

  • Walter Torous
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Description: Examines the elements of entrepreneurial finance, focusing on technology-based start-up ventures, and the early stages of company development. Addresses key questions which challenge all entrepreneurs: how much money can and should be raised; when should it be raised and from whom; what is a reasonable valuation of the company; and how funding, employment contracts and exit decisions should be structured. Aims to prepare students for these decisions, both as entrepreneurs and venture capitalists. In-depth analysis of the structure of the private equity industry.

Professor(s) who recently taught this course:

  • Yael Hochberg
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Description: Financial theory and empirical evidence for making investment decisions. Topics include portfolio theory; equilibrium models of security prices, including the capital asset pricing model and the arbitrage pricing theory; the empirical behavior of security prices; market efficiency; performance evaluation; and behavioral finance. Preference to Course 15 students.

Professor(s) who recently taught this course:

  • Amir Yaron
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Description: Covers advanced topics in corporate finance, including complex valuations, static and dynamic capital structure, risk management, and real options. Also considers security design, restructuring, bankruptcy, corporate control and governance, and international finance issues.

Professor(s) who recently taught this course:

  • Nittai Bergman
  • Nathaniel Gregory
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Description: Examines the economic role of options and futures markets. Topics: determinants of forward and futures prices, hedging and synthetic asset creation with futures, uses of options in investment strategies, relation between puts and calls, option valuation using binomial trees and Monte Carlo simulation, implied binomial trees, advanced hedging techniques, exotic options, applications to corporate securities and other financial instruments.

Professor(s) who recently taught this course:

  • John Cox
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Description: Designed for students seeking to develop a sophisticated understanding of fixed income valuation and hedging methods, and to gain familiarity with the major markets and instruments. Emphasizes tools for quantifying, hedging, and speculating on risk. Topics include duration; convexity; modern approaches to modeling the yield curve; interest rate forwards, futures, swaps and options; credit risk and credit derivatives; mortgages; and securitization. 15.437 strongly recommended.

Professor(s) who recently taught this course:

  • Deborah Lucas
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Description: Studies financial markets, principally equity markets, from an investment decision-making perspective. Develops a set of conceptual frameworks and tools, and applies them to particular investments and investment strategies chosen from a broad array of companies, securities, and institutional contexts. Focuses strongly on case studies; students are expected to prepare each case before class and participate extensively in discussions.

Professor(s) who recently taught this course:

  • Randolph Cohen
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Description: Covers advanced topics in the theory of financial markets with a focus on continuous time models. Topics include multiperiod securities markets and martingales; pricing of contingent securities such as options; optimal consumption and portfolio problems of an individual; dynamic equilibrium theory and the intertemporal capital asset pricing model; term structure of interest rates; and equilibrium with asymmetric information, transaction costs, and borrowing constraints. Primarily for doctoral students in finance, economics, and accounting.

Professor(s) who recently taught this course:

  • Hui Chen
  • Leonid Kogan
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Description: Surveys selected topics in current advanced research in corporate finance. Theoretical and empirical analyses of corporate financing and investment decisions. Some background in information economics and game theory is useful. Primarily for doctoral students in accounting, economics, and finance.

Professor(s) who recently taught this course:

  • Nittai Bergman
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Description: Recent empirical methods in finance, including: the estimation and testing of market efficiency; the random walk hypothesis; the CAPM/APT; various term structure models; option pricing theories; and market microstructures; performance evaluation; bond rating and default analysis; event study methodology; continuous-time econometrics; and general time series methods. An empirical term project is required. Some econometric background and rudimentary computer programming skills are assumed. Primarily for doctoral students in finance, accounting, and economics.

Professor(s) who recently taught this course:

  • Adrien Verdelhan
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Description: Examines a corporation's decision to acquire another firm or the decision to oppose being acquired. Explores three aspects of the merger and acquisition process: the strategic decision to acquire, the valuation decision of how much to pay, and the financing decision on how to fund the acquisition. Sessions alternate between discussions of academic readings and applied cases.

Professor(s) who recently taught this course:

  • Nathaniel Gregory
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Description: Students analyze international financial markets and instruments. Covers topics such as currency markets, exchange rate determination, statistical properties of exchange rates; currency futures and options; hedging foreign exchange risk and managing foreign exchange exposure; international portfolio management; international asset market implications of bubbles, crashes, and crises.

Professor(s) who recently taught this course:

  • Jonathan Parker
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Description: Provides a rigorous foundation for the main analytical techniques and quantitative methods necessary to succeed in the financial services industry. Topics include discrete and continuous asset pricing models, financial econometrics, machine learning methods, and dynamic optimization. Examples of applications include portfolio management, risk management, derivative pricing, and algorithmic trading.

Professor(s) who recently taught this course:

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Description: Provides a unique opportunity to tackle original research problems in capital market analysis and investment management that have been posed by leading experts from the financial community. Students are assigned to teams, and each team is assigned one such problem. Teams present their solutions at a seminar which is attended by representatives of the sponsoring organization and open to the entire MIT community. Not open to students from other institutions.

Professor(s) who recently taught this course:

  • Mark Kritzman
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Description: Bridges the gap between finance theory and finance practice, and introduces students to the broader financial community. Students participate in a series of proseminars with industry guest speakers. Each guest, in collaboration with finance faculty, provides a problem and materials to a team of students. Each team then prepares a report and presents their analysis to the guest speaker and other students for evaluation and feedback. Not open to students from other institutions.

Professor(s) who recently taught this course:

  • John Parsons
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Description: Covers practical aspects of the analytics of finance from the perspective of a quantitative investment manager. Develops an understanding of stochastic processes, option pricing, investment strategies, backtest simulation, data and computational architecture, portfolio construction, trading implementation, and risk management within the context of specific quantitative trading strategies. Follows the natural sequence of research, development, testing, and implementation. Emphasizes financial applications, but also covers mathematical and statistical techniques in some depth, along with their computational implementation in software and the use of real-world market data.

Professor(s) who recently taught this course:

  • Paul Mende
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Description: Organized around applying finance science and financial engineering in the design and management of global financial institutions, markets, and the financial system - the approach used to understand the dynamics of institutional change and the design of financial products and services. Examines the needs of government as user, producer and overseer of the financial system, including the issues surrounding measuring and managing risks in financial crises. Develops the necessary tools of derivative pricing and risk measurement, portfolio analysis and risk accounting, and performance measurement to analyze and implement concepts and new product ideas. Applies these tools to analyze aspects of the financial crisis of 2007-2009. Preference to MBA and MFin students.

Professor(s) who recently taught this course:

  • Robert Merton
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Description: Organized around applying finance science and financial engineering in three related financial activities: retirement finance, lifecycle investing, and asset management. Develops the necessary tools of derivative pricing and risk measurement, portfolio analysis and risk accounting, and performance measurement to analyze and implement concepts and new product ideas. Students should be familiar with basic portfolio-selection theory, CAPM, options, futures, swaps and other derivative securities. Preference to MBA and MFin students.

Professor(s) who recently taught this course:

  • Robert Merton
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Description: Develops a new perspective on the dynamics of financial markets and the roles that human behavior and the business environment play in determining the evolution of behavior and institutions. Draws on a variety of disciplines to develop a more complete understanding of human behavior in the specific context of markets and other economic institutions. Incorporates practical applications from financial markets, the hedge fund industry, private equity, government regulation, and political economy. Students use ideas from this new perspective to formulate several new hypotheses regarding recent challenges to traditional economic thinking.

Professor(s) who recently taught this course:

  • Andrew Lo
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Description: Introduction to the field of alternative investments - principally private equity and hedge funds - within the context of the larger investment domain. Covers the structure and operation of alternative funds, valuation, and topics such as deal sourcing, exits, value added, and alpha strategies. Discusses the evolution of the field as well as what the future may bring. Summarizes subfields such as venture capital, leveraged buyouts, distressed investing, and the spectrum of hedge funds. Addresses investor perspectives, portfolio construction and risk management with alternatives. Encourages active student participation, and includes a project and reading list.

Professor(s) who recently taught this course:

  • Philip Cooper
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Description: Focuses on how corporations make use of the insights and tools of risk management. Taught from the perspective of potential end-users of derivatives (not the dealer), such as manufacturing corporations, utilities, and software firms. Topics include how companies manage risk, instruments for hedging, liability management and organization, and governance and control. 15.437 recommended.

Professor(s) who recently taught this course:

  • John Parsons
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Description: Provides an overview of the investment management industry and an introduction to business fundamentals and valuation. Students read company analyst reports, write papers analyzing various companies, and complete an in-depth company analysis as a final paper. Includes presentations by outside speakers in the investment management industry. Class attendance is mandatory.

Professor(s) who recently taught this course:

  • Jeffrey Shames
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Description: Introduces financial market data architecture and design, with applications to asset pricing, quantitative investment strategies, portfolio management, risk management, and high-frequency trading. Studies how data relationships are structured and how to use modern tools and technologies to manipulate, manage, and analyze financial data sets. Uses real-world data, applications, and cases to illustrate principles and provide practical experience.

Professor(s) who recently taught this course:

  • Paul Mende
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Description: Introduction to corporate finance and capital markets. Topics include project and company valuation, real options, measuring risk and return, stock pricing and the performance of trading strategies, corporate financing policy, the cost of capital, and risk management. Subject provides a broad overview of both theory and practice. Restricted to Executive MBA students.

Professor(s) who recently taught this course:

  • Nathaniel Gregory
  • Stewart Myers
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