Week

Date

Topic/Assignment 

(Chapters should be read in their entirety, including Appendices.)

1

Jan. 14

Why Study Financial Mkts? Overview:  Chap1   Chap2  

US Income Inequality Trend   Risk Mismanagement (NYTimes)     Williams on Asset Bubbles

2

Jan. 21

Understanding Interest Rates:  Chap3  Chap4  Chap 4web  Chap5  Chap6

 Results of Finance Game    

Probabilities of "Innocent" Timing Luck

Duration Calculations (Chapter 3)    Deflation Calculations  Present Value Formulas

       Basics of Supply and Demand,

            Supply & Demand Game

            Example of Supply & Demand: Drug Market

            RAND Corporation Study of US Drug Policies

             (Also, see special issue on Illegal Drug Markets in The Economist, July 26, 2001)

3

Jan 28

Central Banks & Monetary Policy:   Chap7 Chap8      Prisoners' Dilemma - Fed/Congress

    Basic Macro Data - Graphs    CBO Estimates of Y*,

   Gas Prices: Nominal & Real  Money Supply,Macroeconomics, Basic Keynesian Model

4

Feb. 04

Money and Capital Markets: Chs. 9, 10, 11 , 12    Housing Crisis, Debt, and Devaluation

Cyclically Adjusted P/E Ratio   Trade Credits (Not in Book!)  LongTerm Budget Outlook, CBO   CBO Forecast to 2020     Comparisons of OECD Debt

5

Feb. 11

International Finance: Chs. 13, 14   International Comparative Advantage   GDP and ‘Twin Deficit’  "This Time is Different"

       (Long-Term Budget Outlook)  (Balance of Payments)  (Fiscal Deficit) Big Mac Approach to PPP   (BigMax.xls)

  ("The new world disorder" [Keynes and the origins of the "Bretton Woods" Institutions -- the IMF & World Bank], appearing in The New Yorker, Oct 26, 1998 v74 n33 p. 198-207.  I have also put this article on reserve.)

6  Indv. Proj. Due

Feb. 18

Financial Structure and Competition: Chs. 15, 16 ;  Portfolio Optimization and "Beta"

Structured Financial Products (HBS)   Spreadsheet Explanation of "Tranches"

7

Feb. 25

Banking Regulation: Ch. 20, Economic Outlook 2009

8

Mar. 4

Insurance Companies: Ch. 22   (Excel Sheet on RISK AVERSION)

9

Mar. 11

Venture Capital, Investment Brokers: Chs. 23Wall St. Journal Dartboard

10

Mar. 18

Risk & Hedging: Chs. 24, 25, 26  Derivatives   G20 Fiscal Balances   IMF Report to G20

11 

Mar. 25

Review of Class Projects  

12Group Project Due

Apr. 01

Class Presentation of Group Projects

13

Apr. 08

Wrap-up