Elementary finance course

   until we complete this course with videos, you may also go to our previous one: introduction to finance, with a review of accounting

 Table of contents

1. Difference between accounting and finance
2. What is an investment?
3. Physical and financial investments
4. What is a financial product?
5. Stocks and bonds
6. The modelling of time

7. The modelling of uncertain future
8. Random experiment, random variable, stability of long term results
9. The concept of probabilities
10. Simulations with a spreadsheet
11. Distribution or density of a random variable
12. Expectation of a random variable
13. Variance and standard deviation of a random variable
14. Gaussian random variables

• Four situations involving random variables
• Profitability as a random variable
• The risk of a security
• Investors and gamblers
• Utility of money: Saint Petersburg paradox
• Risk aversion

 Chapter 4

• discounting and opportunity cost of capital
• profitability, generalized profitability, internal rate of return

• evaluating investments
• the role of cost accounting
• example 1
• example 2
• example 3

• bonds: new bonds
• bonds: second hand bonds

• what is advanced finance
• continuous time
• option pricing
• no arbitrage principle revisited
• Black & Scholes formula