This course considers existing financial markets, institutions and methods from a number of standpoints: the power that abstract financial theory offers for financial innovation, the role of invention in advancing finance, the importance of understanding human psychology in designing and using financial tools, the gradual democratization of finance through time, the difficult battle against moral hazard, and the many-faceted methods that have been developed to deal with this problem. The course offers a synopsis of financial theory, including such topics as the capital asset pricing model and the theory of derivatives pricing. The course looks at the major financial institutions and methods of our day: insurance, portfolio management, underwriting, corporate management of dividends and debt, real estate finance, monetary policy, investment banking, brokerage, consumer finance, forwards and futures, options, swaps, as well as government public financial institutions of taxation and social security.

The course describes the corporation and its operating environment, the manner in which corporate boards and management evaluate investment opportunities and arrangements for financing such investments, create (or, alternatively, destroy) value for shareholders by planning and managing the transformation of a set of inputs (human labour, raw materials, and technology) into a more highly valued set of outputs (embodying both the original investment value and any surplus value generated), and develop strategies for meeting the claims of financial market participants who are sought as financiers (and, therefore, residual claimants to the cash flows/surplus value) of such investments. It is understood that the shares of surplus value received by various claimants and retained by corporate boards of directors for investment and other uses is the subject of complex social interactions. Thus, the course provides students with a basic analytical framework for understanding how the various struggles over corporate surplus value (in the form of cash flows) may be understood and resolved. In this context, the course is designed to provide students with analytical tools that allow them to determine the "intrinsic value" of a corporation (or any economic institution, including a state-owned enterprise which is to be privatized) and to assess the effectiveness of corporate management in maximizing that value.

Lecturer: to be confirmed (University of Savoie Mont-Blanc - France)