Principles of Finance

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Principles of Finance

Table of Contents

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Introduction

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What is Finance
History
Branches of Finance
Prerequisites
How to use this book?

Section 1 Introductory Concepts

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Chapter 1 The Basics

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An Overview on Money
Principle of Relative Valuation
Role of a CFO and Finance Managers
Is Accounting and Finance one and the same?

Chapter Financial Markets and Institutions

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Stock Markets
Bond Markets
Money Markets
Derivatives Markets
Foreign Exchange Markets
Determinants of Interest Rates
The Federal Reserve System
Commercial Banks
Regulation of Commercial Banks

Chapter 2 The Time Value of Money

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Introduction to Time Value of Money
The concept of returns
The Present Value of Money, Net Present Value and Discounting
The Opportunity Cost of Capital
The effect of compounding and Future Value
Summary

Chapter 3 Applications of Time Value of Money

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How to make Investment Decisions?
All about Perpetuities
Annuity
Summary

Section 2 Investments and Returns

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Chapter 4 Bonds

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Rate of Returns: Varying and Annualized
The Yield Curve
Valuing Bonds
The Yield to Market Curve
Advanced Concepts of Bonds
Summary

Chapter 5 Risk and Return

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What is Risk?
Types of Risk
Risk Management
Summary

Chapter 6 Corporate Finance

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Weighted Average Cost of Capital
Beta and its Uses
Return on Equity
Modigliani & Miller
Project Valuation
Growth Opportunity
Computation or Table Lookup

Chapter 7 Portfolio Theory

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Efficient-Market Hypothesis
Modern Portfolio Theory
Capital Asset Pricing Model
Arbitrage pricing theory
Correlation Among Securities
Optimal Market Portfolio
Summary

Section 3 Market Theory

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Authors

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Minor Contributions

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