This 4-day education will be an intense introduction to Fundamentals of Finance with an Investments flavor. The other Fundamentals of Finance class offered by CEF will have a Corporate Finance flavor.
Each day will consist of morning and afternoon sessions. First day will start with time value of money. We will learn to use present and future value operators and the power of compounding. Then, we will dive into annuity and perpetuity type cash flow streams. Finding the present and future values of these specific cash flow streams will be the necessary steps for valuation of assets. After a quick introduction to time value of money, we will learn to price fixed income securities. Bond valuation will heavily depend on present value operators. Right after learning how to price bonds, we will go through bond price sensitivity to various factors, such as maturity, interest rates and coupon payments.
Second day will start with equity valuation. Differences between common and preferred stocks will be mentioned and preferred stocks will be priced. Participants will then learn constant growth models and super-normal growth models to price equities. Using accounting variables, the dividend payment policies of the firms will be discussed. Second half of the second day will focus on statistical concepts such as expected value and volatility. Participants will then learn the relation between financial risk and return.
During the third day of the certificate program, students will be introduced to modern portfolio theory. Participants will learn to allocate capital between risk-free and risky assets. Second half of the class will focus on one of the most important topics in finance: Methods of finding discount rates through asset pricing models. We will finalize the day by learning how to find the cost of capital of firms. Cost of capital is the essential concept in project evaluation.
Final day of the certificate program will introduce participants to derivative securities. Stock options will be emphasized and call and put options will be covered. Participants will be able to draw conclusions regarding the payoff and profit functions of these stock options. Next, certain option strategies such as protective put, covered call, straddle, strangle and others will be covered.
After these four days, participants will have a strong foundation of finance with a flavor of Investments. They will be ready to take advanced classes such as Risk Management, Investments and Asset Pricing.