Finance Foundations
From present value to portfolios, markets, and investment decisions.
A serious but accessible finance course for students and motivated investors. The course uses a formal finance sequence as its backbone, then connects each concept to practical market interpretation, securities, valuation, portfolio construction, and investment decision-making.
What you will learn
- Read financial statements and 10-K filings
- Value cash flows, bonds, and equities
- Measure risk and construct portfolios
How the course works
- Interactive lessons with worked examples
- Scroll-driven visualizations and case studies
- Foundational sequence adapted from MIT 15.401
What you will build
- A working financial vocabulary
- The ability to read a chart as a story
- A portfolio-construction toolkit
9 modules.
46 lessons.
Introduction and Course Overview
Orientation to the course, the problems finance sets out to solve, and how to use Open Portfolio Studio as a learning and investigation environment.
Present Value Relations
Learn how finance converts future cashflows into value today using timelines, discount rates, net present value (NPV), perpetuities, annuities, compounding, and inflation.
Fixed-Income Securities
Learn how bonds work, how fixed cash flows are valued, how yield curves encode market expectations, and why bond prices move when rates change.
Equities
Equity as ownership, dividend discount models, multi-stage growth, earnings retention, and growth opportunities.
Risk and Return
What risk and return mean, how to measure historical return and volatility, how covariance, correlation, diversification, systematic risk, and beta work, and what historical stock-return data show.
Portfolio Theory
Portfolio weights and returns, portfolio risk with covariance and correlation, and diversification across many assets.
The CAPM and APT
The Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT): market equilibrium, beta and systematic risk, the security market line, estimating beta, alpha and performance, multifactor models, and a synthesis in practice.
Capital Budgeting
The NPV rule, the internal rate of return (IRR) and payback, project cash flows, sensitivity and scenario analysis, and real options intuition.
Efficient Markets
The efficient market hypothesis, forms of efficiency, anomalies and limits to arbitrage, active versus passive investing, and information in prices.
Ready to begin?
Start with the first lesson, then continue into the portfolio-building course.