The course will be divided into three parts. The first part is an overview of the financial system and its role in the macroeconomy. We will develop fundamental concepts of the time value of money in a money/credit market. In the middle part of the course, we discuss various theories explaining the structure of the financial market, stressing the behavior of market participants according to the return and risk. Our discussion will include portfolio theory, efficient market hypothesis, and the capital asset pricing model.

The final third of the course focuses on the delivery of the funds to a firm and its impact on the valuation of a firm such as equity financing and debt financing.