An introduction to the key concepts in modern finance

In this module, you’ll be introduced to the concepts and tools that are essential for the study of modern finance theory.

You’ll learn about the time value of money and how to measure returns and risks for individual assets and portfolios of assets, and you will meet benchmark asset pricing models, such as the CAPM.

You will also be introduced to the idea of arbitrage in financial markets and how to use it to compute prices for new assets.

The issues you’ll cover in Foundations of Finance will provide core knowledge which will be developed in the modules that follow.

The topics you’ll cover in this module include:

  • Discounting/compounding and time-value of money
  • The NPV rule
  • Risk and return in financial markets
  • Portfolio theory and the CAPM
  • Absence of arbitrage and its application to pricing securities.

Module Leader

The Foundations of Finance module is led by Professor Richard Payne:

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