Financial Modeling Valuation

V703 - Winter 2007

Course Description

This course is an introduction to concepts and techniques of modern financial modeling. Our central problem will be how to assign a monetary value to an investment decision that has to be taken in an uncertain environment. Canonical examples of this problem are the decision to start a firm or to invest in a new project, but the ideas explored in the course can be applied to a variety of other examples, such as the decision to purchase a new book, to enroll in a post-secondary education program, or to invest hours of work in a new MBA course. In order to tackle this problem, we will extend the traditional paradigm of Net Present Value of an investment using the techniques of (1) real options to account for the value of time flexibility of a decision under uncertainty and (2) game theory to  obtain the value of strategic competition and cooperation.

Further details about the course are available in the course outline.

Lecture Notes


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