## 15.401 Finance Theory I

**15.401 Finance Theory I (Fall 2008, MIT OCW)**. Taught by Professor Andrew Lo, this course provides a rigorous introduction to the fundamentals of
modern financial analysis and applications to business challenges in valuation, risk analysis, corporate investment decisions, and basic security analysis and
investment management. The four major sections of the course are: (A) an introduction to the financial system, the financial challenges firms and households face,
and the principles of modern finance in tackling these challenges; (B) valuation of stocks, bonds, forwards, futures, and options; (C) methods for incorporating
risk analysis into valuation models, including portfolio theory, mean-variance optimization, and the Capital Asset Pricing Model; and (D) applications to
corporate financial decisions, including capital budgeting and real options.
(from **ocw.mit.edu**)

Lecture 16 - The CAPM and APT II |

This lecture covers how to calculate a proper discount rate, the application of CAPM, and performance evaluation using the security market line.

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