Financial Management

Syllabus

• Investment environment: IPOs, exchanges, financial instruments; inflation (CPI) and market interest rates.
• Capital allocation between risky and risk-free assets; risk tolerance; utility and indifference curves.
• Mean–variance portfolio theory (Markowitz): efficient frontier and the optimal risky portfolio via the tangency concept.
• Capital Asset Pricing Model (CAPM): model structure and key implications; estimating beta via regression.
• Fixed-income securities: bond pricing and ratings; interest-rate expectations (conceptual).
• Equity valuation: intrinsic value; Gordon growth model (conceptual derivation).
• Financial statement analysis: DuPont decomposition of ROE.
• Options and strategies: protective put, covered call, spreads, strip/strap; payoff/profit functions.
• Put–call parity; binomial option pricing; Black–Scholes framework (overview); delta/hedge ratio interpretation.