Introduction

This introductory course aims at providing basic skills in applying financial mathematics and analysis of profitability related to firms' real investments. The analysis assumes understanding of risk and how it needs to be taken into account when the appropriate rate of return on invested capital is determined. As such the course also gives an introduction to capital market theory since rates of return are derived based on the notion that they represent an opportunuty cost in well-functioning markets.

Course content

  • Introduction: Brief overview of main topics
  • Financial mathematics
  • Models of profitability and decison criteria applied when applying the net present value principle, the internal rate of return and payback models.
  • Portfolio diversification and estimation of relevant risk.
  • Capital asset pricing model to estimate the risk-adjusted, required rate of return.

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.