Class Schedule: Introduction to Finance I. Fall, 2023

Block 1

• Interest rates, Compounding, and the Time Value of Money
  • Concept 1:
    • Treasury Bills
    • Bond-equivalent yield
    • Compounding period and effective annual yield
      • Motivating Discussion
      • Accompanying Notes.
      • Accompanying Spreadsheet.
      • Accompanying Problem Set.
      • Additional problems and notes.
        • Solutions to these 2 problem sets.
      • US Treasury Press Release with results of 26-week Bill auction on September 25, 2023.
    • Sample Quiz 1
      • Key to Sample Quiz.
    • 2018 Quiz 1.
      • Key to 2018 Quiz 1.
    • 2019 Quiz 1.
      • Key to 2019 Quiz 1.

    • Treasury Site Containing Auction and buy-back results.
    • The size of the fixed income market (from sifma).

    • Shell Spreadsheet for Class 1, 2021.
      • Complete Spreadsheet from class October 20, 2021.

  • Concept 2:
    • Treasury Notes and Bonds
    • Spot Rates
    • Yield-to-maturity
      • 10-year Treasury Note Auction Results - Press Release from August 10, 2022.
      • Accompanying Notes.
      • Accompanying Spreadsheet.
      • Accompanying Problem Set.
        • Problem Set Key.
      • Additional problems.
        • Key--this also contains step-by-step instructions on using Solver to obtain a security's yield-to-maturity.
      • 2018 Quiz 2.
        • Key to 2018 Quiz 2.
      • 2019 Quiz 2.
        • Key to 2019 Quiz 2.
      • Worked out problem from class on October 27 similar to Number 7 from Problem Set 1
      • Shell spreadsheet for Lecture on Concept 2.
      • Completed spreadsheet from Lectures on Concept 2.

  • Concept 3:
    • Perpetuities and annuities
    • Mortgages
      • Perspectives from class on October 30, 2018.
      • Class notes from November 1, 2018.
      • Accompanying Notes.
      • Accompanying Spreadsheet.
      • Perpetuity worksheet.
      • Spreadsheet with the student loan example and amortization table.
      • Accompanying Problem Set.
        • Key to this problem set.
      • Mortgage spreadsheet.
      • Sample Quiz.
        • Key to this quiz.
      • 2018 Quiz 3.
        • Key to 2018 Quiz 3.
      • 2019 Quiz 3.
        • Key to 2019 Quiz 3.

  • Concept 4:
    • Absence of arbitrage in financial markets
      • Accompanying Spreadsheet.
      • Notes from November 6 and 8 classes.
      • In-class example from Nov 12, 2019.
      • Accompanying Problem Set 1.
        • Key to this Problem Set.
      • Accompanying Second Problem Set.
        • Key to this Problem Set.
      • Problem Set for 2018 Quiz 4 -- only 2 time periods (Key included).
      • 2018 Quiz 4.
        • Key to 2018 Quiz 4.
      • 2019 Quiz 4.
        • Key to 2019 Quiz 4.

Block 2

• How Markets handle expected losses
  • Concept 5:
    • Catastrophe Bonds -- (No systematic risk):
      • Perilous Paper, The Economist, October 3, 2013.
      • The Insurance Industry has been Turned Upside Down by Catastrophe Bonds, by Leslie Scism and Anupreeta Das, The Wall Street Journal, August 8, 2016.
      • Why Buffett is Steering Clear of Catastrophe Bonds, by Gillian Tett, The Financial Times, May 8, 2014.
      • Artemis. Website with all things Cat Bond.
      • Class Notes from November 13 and 15.
      • Accompanying Spreadsheet.
      • Accompanying Problem Set.
        • Problem Set Key
      • Sample Quiz.
        • Sample Quiz Key
      • 2018 Quiz 5.
        • Key to 2018 Quiz 5.
      • 2019 Quiz 5.
        • Key to 2019 Quiz 5.

      • Spreadsheet with macro (VBA subroutine) using Monte Carlo to evaluate the performance of a large cat bond portfolio.
      • Spreadsheet with nature playing according to laws of probability to affect the realized rate of return on a portfolio of Cat Bonds.

  • Concept 6:
    • Corporate Debt: Expected losses plus Systematic Risk
      • Moody's Analytics Weekly Report from September 24, 2020.
      • Accompanying Spreadsheet.
      • Notes on Corporate Bonds
      • November 2020 Issuance and outstandings from Sifma.
      • Sifma charts on the fixed income markets.
      • ``Corporate Bond Issuance Sets Global Record,'' by Joe Rennison, Financial Times, September 6, 2019.
      • Sample Quiz.
        • Related Graph (updated, from FRED).
        • Key to Sample Quiz.
      • 2018 Quiz 6.
        • Key to 2018 Quiz 6.
      • 2019 Quiz 6.
        • Key to 2019 Quiz 6.

  • Concept 7:
    • Corporate Debt: Optimal design and interfaces with Capital Markets
      • Spreadsheet to clarify the concept of expected return -- as it relates to yield, hazard rate, and risk premium
      • Review of bond valuation.
      • Review and example questions for Quiz 7.
        • Key to example questions for Quiz 7.
      • 2018 Quiz 7.
        • Key to 2018 Quiz 7.
      • 2019 Quiz 7.
        • Key to 2019 Quiz 7.
      • Essay on the dangers in corporate debt from the New York Times of November 26, 2018.
      • Inside or Bank Debt
      • Syndicated Bank Loans
      • Private Placements
      • Short notes on determinants of debt costs, and sources of debt capital.
        • WeWork1
        • WeWork2
        • WeWork3
        • WeWork4
        • WeWork5
      • Public Debt
        • Analog Device's $300 million debt offering of September 15, 2022.
        • Apple's $6.5 billion debt offering of August 5, 2021.
        • Apple's $7 billion debt offering in September 2019.
        • Apple's $7 billion debt offering in May, 2017.
        • Verizon Communications $49 billion debt offering of September 2013

---