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Leonid Kogan,
Jiang Wang,
and
Egor Matveyev
Many of the most important financial decisions in business are done under uncertainty. This is the second course in the Foundations of Modern Finance series of courses, as part of the MicroMasters® Program in Finance. It provides you with the science behind making financial decisions under uncertainty.
Read more
Many of the most important financial decisions in business are done under uncertainty. This is the second course in the Foundations of Modern Finance series of courses, as part of the MicroMasters® Program in Finance. It provides you with the science behind making financial decisions under uncertainty.
Read more
Many of the most important financial decisions in business are done under uncertainty. This is the second course in the Foundations of Modern Finance series of courses, as part of the MicroMasters® Program in Finance. It provides you with the science behind making financial decisions under uncertainty.
We build on the core set of basic principles taught in the first part, and continue to develop a powerful and general framework for making financial decisions in business and in personal financial planning. We introduce financial derivative securities, and their valuation models, discuss the capital structure decision of firms, and explore the interaction between investing and financing.
At the center of financial decision making is the valuation problem. How much value does a business investment create? What is a fair price to pay for a financial asset? We develop models and analytics for measuring risk and for valuing financial assets. We apply valuation models to financial securities, including stocks and bonds, and to project valuation and capital budgeting.
Register for this course and see more details by visiting:
OpenCourser.com/course/rbtbsi/foundations
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What's inside
Learning objectives
- Valuation of futures, forward, and options
- Portfolio optimization and the capital asset pricing model (capm)
- Capital structure decisions within the firm
- The interaction between investing and financing
- Valuation of futures, forward, and options
- Portfolio optimization and the capital asset pricing model (capm)
- Capital structure decisions within the firm
- The interaction between investing and financing
Syllabus
Forwards and Futures
Options
Portfolio Theory
Capital Asset Pricing Model (CAPM)
Read more
Syllabus
Forwards and Futures
Options
Portfolio Theory
Capital Asset Pricing Model (CAPM)
Read more
Capital Budgeting and Real Options
Financing/Capital Structure
Interaction between Investing and Financing
Payout and Risk Management
Good to know
Good to know
Know what's good ,
what to watch for , and
possible dealbreakers
Explores financial derivative securities and develops their valuation models
Taught by renowned instructors Leonid Kogan, Jiang Wang, and Egor Matveyev
Develops a general framework for making financial decisions under uncertainty
Examines the interaction between investing and financing
Requires background knowledge in financial principles
Requires understanding of calculus and probability
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Activities
Be better prepared
before
your course. Deepen your understanding
during
and
after
it. Supplement your coursework and achieve mastery of the topics covered
in Foundations of Modern Finance II with these
activities:
Organize and Review Course Materials
Show steps
Take the time to organize and review your course notes, assignments, and quizzes to solidify your understanding of the key concepts and strengthen your recall of the material.
Browse courses on
Review
Show steps
-
Gather all your course materials, including notes, handouts, and assignments.
-
Review your notes and highlight or summarize key points.
-
Complete any outstanding assignments or quizzes to reinforce your learning.
Start a Study Group with Classmates
Show steps
Form a study group with your classmates to review course material, discuss concepts, and work on assignments together, fostering a collaborative and supportive learning environment.
Show steps
-
Identify classmates who are interested in forming a study group.
-
Establish regular meeting times and a meeting schedule.
-
Prepare for each meeting by reviewing the assigned material and preparing questions.
-
Actively participate in discussions and share your insights.
Attend a Networking Event for Finance Professionals
Show steps
Meet and connect with professionals in the finance industry to expand your network, gain career insights, and learn about industry trends, providing a valuable complement to the course content.
Browse courses on
Networking
Show steps
-
Identify and register for a relevant networking event.
-
Prepare an elevator pitch and materials to introduce yourself and your interests.
-
Attend the event and actively engage with other attendees.
Four other activities
Expand to see all activities and additional details
Show all seven activities
Review Probability and Stochastic Processes
Show steps
Review the basics of probability and stochastic processes, including random variables, probability distributions, and stochastic processes, to strengthen your foundation for this course's material.
Browse courses on
Probability
Show steps
-
Review your notes or textbook on probability and stochastic processes.
-
Complete practice problems online or in a textbook.
-
Take a practice quiz or exam to test your understanding.
Attend a Workshop on Financing and Capital Budgeting
Show steps
Participate in a workshop led by an expert to gain practical insights and best practices in financing and capital budgeting, expanding your knowledge beyond the course material.
Browse courses on
Financing
Show steps
-
Identify and register for a relevant workshop.
-
Attend the workshop and actively engage with the instructor.
-
Apply the concepts learned to your own financial decision-making.
Practice Financial Derivatives Valuation
Show steps
Engage in repetitive exercises to reinforce your understanding of financial derivatives valuation, such as Black-Scholes and binomial models, to improve your proficiency in this essential aspect of the course.
Browse courses on
Financial Derivatives
Show steps
-
Find practice problems online or in a textbook.
-
Solve the problems using the appropriate models.
-
Check your answers against provided solutions or consult with a tutor if needed.
Develop a Financial Portfolio Optimization Model
Show steps
Create a written or digital model that demonstrates your understanding of portfolio optimization and the application of the Capital Asset Pricing Model (CAPM) to construct and analyze efficient portfolios.
Browse courses on
Portfolio Optimization
Show steps
-
Review the concepts of portfolio optimization and CAPM.
-
Design and implement a model using a programming language or software.
-
Test your model with different inputs and analyze the results.
Organize and Review Course Materials
Show steps
Take the time to organize and review your course notes, assignments, and quizzes to solidify your understanding of the key concepts and strengthen your recall of the material.
Browse courses on
Review
Show steps
Show steps
Show steps
- Gather all your course materials, including notes, handouts, and assignments.
- Review your notes and highlight or summarize key points.
- Complete any outstanding assignments or quizzes to reinforce your learning.
Start a Study Group with Classmates
Show steps
Form a study group with your classmates to review course material, discuss concepts, and work on assignments together, fostering a collaborative and supportive learning environment.
Show steps
Show steps
Show steps
- Identify classmates who are interested in forming a study group.
- Establish regular meeting times and a meeting schedule.
- Prepare for each meeting by reviewing the assigned material and preparing questions.
- Actively participate in discussions and share your insights.
Attend a Networking Event for Finance Professionals
Show steps
Meet and connect with professionals in the finance industry to expand your network, gain career insights, and learn about industry trends, providing a valuable complement to the course content.
Browse courses on
Networking
Show steps
Show steps
Show steps
- Identify and register for a relevant networking event.
- Prepare an elevator pitch and materials to introduce yourself and your interests.
- Attend the event and actively engage with other attendees.
Four other activities
Expand to see all activities and additional details
Show all seven activities
Review Probability and Stochastic Processes
Show steps
Review the basics of probability and stochastic processes, including random variables, probability distributions, and stochastic processes, to strengthen your foundation for this course's material.
Browse courses on
Probability
Show steps
Show steps
Show steps
- Review your notes or textbook on probability and stochastic processes.
- Complete practice problems online or in a textbook.
- Take a practice quiz or exam to test your understanding.
Attend a Workshop on Financing and Capital Budgeting
Show steps
Participate in a workshop led by an expert to gain practical insights and best practices in financing and capital budgeting, expanding your knowledge beyond the course material.
Browse courses on
Financing
Show steps
Show steps
Show steps
- Identify and register for a relevant workshop.
- Attend the workshop and actively engage with the instructor.
- Apply the concepts learned to your own financial decision-making.
Practice Financial Derivatives Valuation
Show steps
Engage in repetitive exercises to reinforce your understanding of financial derivatives valuation, such as Black-Scholes and binomial models, to improve your proficiency in this essential aspect of the course.
Browse courses on
Financial Derivatives
Show steps
Show steps
Show steps
- Find practice problems online or in a textbook.
- Solve the problems using the appropriate models.
- Check your answers against provided solutions or consult with a tutor if needed.
Develop a Financial Portfolio Optimization Model
Show steps
Create a written or digital model that demonstrates your understanding of portfolio optimization and the application of the Capital Asset Pricing Model (CAPM) to construct and analyze efficient portfolios.
Browse courses on
Portfolio Optimization
Show steps
Show steps
Show steps
- Review the concepts of portfolio optimization and CAPM.
- Design and implement a model using a programming language or software.
- Test your model with different inputs and analyze the results.
Career center
Learners who complete Foundations of Modern Finance II will develop knowledge and skills
that may be useful to these careers:
Financial Analyst
Financial Analyst
Financial Analysts help businesses and individuals make investment decisions and evaluate the financial performance of companies. Students who wish to enter this career field will find the valuation models and analytics taught in this course particularly relevant. Additionally, this course can provide a solid foundational understanding of capital budgeting, financial risk, and other concepts that are crucial for success as a Financial Analyst.
Portfolio Manager
Portfolio Manager
Portfolio Managers manage investment portfolios for individuals and institutions. This course can be incredibly useful for those who wish to enter this field, as it provides a comprehensive overview of portfolio optimization, capital asset pricing models, and other important investment management concepts.
Trader
Trader
Traders buy and sell financial instruments for investment firms and other organizations. This course can provide a strong understanding of the financial markets, valuation models, and risk management techniques that are essential for success as a Trader.
Corporate Finance Analyst
Corporate Finance Analyst
Corporate Finance Analysts help companies make financial decisions, including capital budgeting, mergers and acquisitions, and dividend policy. This course can provide a solid understanding of the financial principles and analytical techniques used in Corporate Finance, making it a valuable resource for those who wish to pursue this career.
Investment Advisor
Investment Advisor
Investment Advisors provide investment advice and guidance to individuals and institutions. This course can provide a strong foundation in the financial principles and analytical techniques used by Investment Advisors, making it a valuable resource for those who wish to pursue this career.
Risk Manager
Risk Manager
Risk Managers identify, assess, and manage financial risks for companies and organizations. The valuation models, risk assessment techniques, and financial decision-making principles taught in this course can help build a strong foundation for a career in Risk Management.
Financial Planner
Financial Planner
Financial Planners provide financial advice and guidance to individuals and families. The valuation models, risk assessment techniques, and financial decision-making principles taught in this course can provide a strong foundation for a career in Financial Planning.
Credit Analyst
Credit Analyst
Credit Analysts assess the creditworthiness of companies and individuals. This course can provide a strong understanding of the financial analysis and risk assessment techniques used by Credit Analysts, making it a valuable resource for those who wish to pursue this career.
Financial Consultant
Financial Consultant
Financial Consultants provide financial advice and guidance to businesses and individuals. This course can provide a strong foundation in the financial principles and analytical techniques used by Financial Consultants, making it a valuable resource for those who wish to pursue this career.
Venture Capitalist
Venture Capitalist
Venture Capitalists provide funding to early-stage companies with high growth potential. This course can provide a strong foundation in the financial analysis and decision-making techniques used by Venture Capitalists, making it a valuable resource for those who wish to pursue this career.
Investment Banker
Investment Banker
Investment Bankers provide advisory services to businesses, governments, and other organizations in relation to capital raising and mergers and acquisitions. This course can provide a strong foundation in financial decision making, valuation, and risk management, all of which are critical to success in this role.
Private Equity Investor
Private Equity Investor
Private Equity Investors acquire and manage private companies. This course can provide a strong foundation in the financial analysis and decision-making techniques used by Private Equity Investors, making it a valuable resource for those who wish to pursue this career.
Quantitative Analyst
Quantitative Analyst
Quantitative Analysts use mathematical and statistical models to analyze financial data and make investment decisions. This course can provide a foundation in the financial modeling and analytical techniques used by Quantitative Analysts, making it a valuable resource for those who wish to pursue this career.
Actuary
Actuary
Actuaries use mathematical and statistical models to assess risk and uncertainty in the insurance industry. This course can provide a foundation in the financial modeling and analytical techniques used by Actuaries, making it a valuable resource for those who wish to pursue this career.
Economist
Economist
Economists study the economy and economic trends. This course may be useful for those who wish to enter this field, as it provides a foundation in financial decision making, valuation, and risk management.
For more career information including salaries, visit:
OpenCourser.com/course/rbtbsi/foundations
Reading list
We've selected 13 books
that we think will supplement your
learning. Use these to
develop background knowledge, enrich your coursework, and gain a
deeper understanding of the topics covered in
Foundations of Modern Finance II.
Provides a comprehensive overview of options, futures, and derivatives, and is commonly used as a textbook in academic institutions. It is an excellent resource for gaining a deeper understanding of the valuation and risk management of financial derivatives.
Classic in the field of portfolio theory and investment analysis, and is widely used as a textbook in academic institutions. It provides a comprehensive overview of the theory and practice of portfolio management, with a focus on the application of modern portfolio theory.
Classic in the field of value investing and provides timeless principles for making sound investment decisions. It valuable resource for anyone interested in developing a long-term investment strategy.
Save
Is another classic in the field of value investing and provides a comprehensive framework for security analysis. It valuable resource for anyone interested in developing a deep understanding of the fundamental principles of investing.
Provides a comprehensive overview of fixed income securities, with a focus on valuation, risk, and management. It valuable resource for anyone interested in developing a deep understanding of the fixed income market.
Provides a rigorous and comprehensive treatment of the theory of corporate finance. It valuable resource for anyone interested in developing a deep understanding of the theoretical foundations of corporate finance.
Provides a comprehensive overview of quantitative equity investing techniques and strategies. It valuable resource for anyone interested in developing a deep understanding of the quantitative approaches to equity investing.
Save
Provides a comprehensive overview of algorithmic trading strategies and their rationale. It valuable resource for anyone interested in developing a deep understanding of the algorithmic approaches to trading.
Provides a comprehensive overview of fixed income securities, with a focus on their characteristics, valuation, and risk management. It valuable resource for anyone interested in developing a deep understanding of the fixed income market.
Provides a detailed explanation of the Black-Scholes option pricing model, which fundamental tool for pricing options. It valuable resource for anyone interested in developing a deep understanding of option pricing.
Save
Provides a concise overview of corporate finance, with a focus on the essential concepts and principles. It valuable resource for anyone interested in developing a basic understanding of corporate finance.
Provides a comprehensive overview of investments, with a focus on the principles of portfolio management and asset allocation. It valuable resource for anyone interested in developing a comprehensive understanding of investment management.
Save
Provides a comprehensive overview of the economics of money, banking, and financial markets, with a focus on the role of the financial system in the economy. It valuable resource for anyone interested in developing a deep understanding of the financial system.
For more information about how these books relate to this course, visit:
OpenCourser.com/course/rbtbsi/foundations
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Effort
10 to 14 hours per week for 12 weeks
Level
Advanced
Via
edX
Institution
Massachusetts Institute of Technology
Instructors
Leonid Kogan
Jiang Wang
Egor Matveyev
Session
July 15, 2024
- January 13, 2026
Language
English
Transcript
English
This course belongs to a
collection
called
Finance. It's comprised of four courses:
- Foundations of Modern Finance I
- Foundations of Modern Finance II (viewing)
- Mathematical Methods for Quantitative Finance
- Derivatives Markets: Advanced Modeling and Strategies
Good to know
Explores financial derivative securities and develops their valuation models
Taught by renowned instructors Leonid Kogan, Jiang Wang, and Egor Matveyev
Develops a general framework for making financial decisions under uncertainty
Examines the interaction between investing and financing
Requires background knowledge in financial principles
Requires understanding of calculus and probability
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