Introduction to Finance
Finance, or financial economics, covers two main areas: asset pricing and corporate finance. For asset pricing, a field that studies how investors value securities and make investment decisions, we will discuss topics like prices, risk, and return, portfolio choice, CAPM, market efficiency and bubbles, interest rates and bonds, and futures and options. For corporate finance, a field that studies how firms make financing decisions, we will discuss topics like security issuance, capital structure, and firm investment decisions (the net present value approach, and mergers and acquisitions). In addition, if time permits, we will cover some topics in behavioral finance and household finance such as limits to arbitrage and investor behavior.
The online version of the Caltech Catalog is provided as a convenience; however, the printed version is the only authoritative source of information about course offerings, option requirements, graduation requirements, and other important topics.