Capital Market Theory Rsm 332 - Week 2

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CAPITAL MARKET THEORY RSM 332 – Week 2
Week 1 – Introduction – Financial Accounting (Review) Week 2 – Financial Markets and Net Present Value Week 3 – Present Value Concepts Week 4 – Bond Valuation and Term Structure Theory Week 5 – Valuation of Stocks Week 6 – Risk and Return – Problem Set #1 Due Week 7* – Midterm (Tuesday*) Week 8 - Portfolio Theory Week 9 – Capital Asset Pricing Model Week 10 – Arbitrage Pricing Theory Week 11 – Operation and Efficiency of Capital Markets Week 12 – Course Review – Problem Set #2 Due

Contact: otto.yung@alumni.utoronto.ca

CAPITAL MARKET THEORY RSM 332 – Week 2
AGENDA 1. 2. 3. 4. 5. Announcements Financial Markets and Net Present Value Survey Results Optional Material (e.g. Cases, Practical
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C0
Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto.yung@alumni.utoronto.ca and Corporate Policy) 4 th Edition 2004

Consumption and Investment without Capital Markets
C1

C0
Reference: Copeland, Weston, Shastri (Financial Theory Contact: otto.yung@alumni.utoronto.ca and Corporate Policy) 4 th Edition 2004

Consumption and Investment without Capital Markets
C1
Marginal Rate of Transformation (MRT) MRT = ∂C1 ∂C0

C0
Reference: Copeland,
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