1. Investments: Course Introduction 01/05/09

2. 1-2 Review: Basic Concepts of Finance Time Value of Money Risk and Return

3. 1-3 The three branches of finance Corporate Finance Investments Financial Institutions and Markets

4. 1-4 Investment Defined Investment literally means “putting something in to somewhere else”. In Finance, a more practical definition is the purchase of a financial product or other item of value with an expectation of favorable future returns. –Expectation denotes risk

5. 1-5 What are the issues related to investments? What are the available securities? How do I go about buying these securities? How do I decide which securities to buy? –Valuation –Within the context of a portfolio –Other reasons for buying

6. 1-6 Course overview Brief discussion of return and risk and security types –Stocks, bonds, derivatives (futures and options) Basics of trading Equity valuation –DCF models, residual income models, relative valuation models Equity risk and return within the context of a portfolio –Diversification

7. 1-7 Course overview Bonds –Corporate, Government, derivative products and features –Interest rates and bond valuation Basics of derivative securities (options and futures) –Use in speculation and hedging –Option strategies