Finance Made Difficult

The recent financial crisis has underscored the importance of well-functioning financial markets to global economic growth and stability, and has also revealed significant weaknesses that require further study. Now more than ever, a deeper understanding of the financial system is essential for individual financial planning, institutional portfolio management, and regulatory reform.

In this one-week mini-course, we will provide an overview of the fundamental principles of financial economics and some of their practical applications to personal investments, risk management, government policy, and understanding the crisis. Topics will include: basic valuation models for stocks and bonds; the random walk hypothesis; mean-variance portfolio optimization; stochastic calculus, option-pricing theory, and financial engineering; human behavior, consumer financial decision-making, and retirement planning; and systemic risk and the financial crisis.

There are no formal prerequisites for this mini-course other than a general interest in financial markets, investments, and risk. However, a healthy respect for mathematical and statistical rigor is recommended. This course is open only to MIT faculty and senior/principal research scientists. .

COURSE MATERIALS AND AN UPDATED SCHEDULE HAVE BEEN POSTED.

We hope to see you in June!

For more information about the MIT Sloan Finance Group, please visit http://mitsloan.mit.edu/finance.