Moving away from Money

This chapter discusses other electronic payment methods. It describes how these initially arose, and the encryption methods that make them possible. It explains how cryptocurrencies work.

Asset Pricing I: Risk-Neutral Pricing

This chapter develop the an asset pricing methodology, presents the standard risk-neutral asset pricing model, and uses it to price a wide of assets.

Investment and Capital Structure of the Firm

This chapter examines the implications of the stochastic discount factor for optimal firm behaviour. The last section focuses on capital structure decisions with bankruptcy costs and the tax shield implied by debt.

Asset Pricing with Growth

This chapter extends the risk-neutral asset pricing model to account for long-run growth.

Overview of the Financial System

This chapter describes the overall financial system, and does a detailed taxonomy of the types of financial assets and markets. It also discusses the role of penalties in enforcing contracts.

Math Reviews

This chapter provides a brief review of the key mathematical concepts we will be using in the text. These include aspects of optimization theory, derivatives, and probability theory.

The Financial Meltdown and the Great Recession

This chapter lays out the major events and causes of the financial meltdown and recession of the 2000s. It also discusses the Federal Reserves policy response to the crisis.

Exchange Rates and Nominal Interest Rates

This chapter discusses exchanges and the different types of exchange rate regimes. It describes how exchange rates impact on real exchange rates, and how movements in the real exchange rate are associated with boom-bust cycles. It also discusses interest parity.

Asset Pricing III: Arbitrage-Based Pricing

This chapter develops a arbitrage-based pricing model in which the extent to which the stochastic discount factor varies is unrestricted.

Asset Pricing II

This chapter presents an number of key anomalies from the perspective of the risk-neutral pricing model and presents the risk-averse pricing model. It discusses how this helps to correct some of the key implications of the model relative to the risk-neutral model, but fails to go far enough.