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MS&E 145: Introductory Financial Analysis

Formerly MS&E 142. Evaluation and management of money, complicated by temporary distributions and uncertainty. The "time-value of money" and its impact on economic decisions (both personal and corporate) with the introduction of interest rate (constant or varying over time); several approaches critically examined and made consistent as suitable metrics of comparison. The concept of investment diversification in the presence of uncertainty; portfolio selection and efficient frontier analysis leading to the formulation of the Capital Asset Pricing Model; practical implementation of the concepts, including comparison of loan (e.g., house and auto) terms, credit card financial terms, interest rate term structure and its relationship to rate-of-return analysis, and graphical presentation of uncertain investment alternatives; and current economic news of interest. Critical thinking, discussion, and interaction, using group and computer labs assignments. Prerequisites: differential calculus and probability. Recommended: optimization.
Terms: Aut | Units: 3 | Grading: Letter or Credit/No Credit
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