An overview of the ideas, methods, and institutions that permit human society to manage risks and foster enterprise. Description of practices today and analysis of prospects for the future. Introduction to risk management and behavioral finance principles to understand the functioning of securities, insurance, and banking industries.
Fabozzi, Frank J., Franco Modigliani, Frank J. Jones, and Michael G. Ferri. Foundations of Financial Markets and Institutions, 4th ed. Prentice Hall, 2010.
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Brealey, Richard. Stuart C. Myers, and Franklin Allen. Principles of Corporate Finance, 8th edition. McGraw-Hill/Irwin, 2005.
Bagehot, Walter. Lombard Street: A Description of the Money Market. Scribner, Armstrong & Co, 1873. (freely available as a Google eBook)
Carnegie, Andrew. The Gospel of Wealth and Other Timely Essays. The Century Company, 1901. (freely available as a Google eBook)
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Ellis, Charles. The Partnership: The Making of Goldman Sachs. Penguin, 2008.
Fraser, Steve. Wall Street: America’s Dream Palace. Yale University Press, 2009.
Gorton, Gary. “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007.” Federal Reserve Bank of Atlanta Financial Markets Conference, 2009.
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Shiller, Robert J. The New Financial Order: Risk in the 21st Century. Princeton University Press, 2003.
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Some facility with elementary algebra and calculus required. Course exams consist of roughly 50% math and theory problems and 50% facts and general understanding questions about financial markets.
- Midterm exam 1: 20%
- Midterm exam 2: 30%
- Problem sets: 10%
- Final exam: 40%