Foundations of Finance, FINC-UB.0002.008, Fall, 2020, Section 8

Prof. Joel Hasbrouck


This page last updated: Sunday September 20, 2020 10:51 AM.

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Current notes, announcements, and handouts are posted to the NYU Classes page.


This is a rotational section. This means that half our meetings will be in-person and half will be on Zoom. Attendance is required for all sessions. A session is either in-person or Zoom, but not both: an in-person class will not be Zoomed; a Zoom class won't have a physical meeting. The in-person and Zoom dates are not yet fixed.


This course is an introduction to the world's financial system: securities and institutions that create, trade, hold, manage and regulate them. In this course we mostly take the viewpoint of an investor, someone who is going into the financial markets to maximize gain and minimize risk. In the follow-on course (corporate finance), we take the perspective of financial manager, someone who is making firm-specific business decisions to maximize the value of the firm. By the end of this course, you should be able to comprehend most of the Markets pages of the Wall Street Journal.


Finance, even at the introductory level, is a rigorously quantitative discipline that builds on prior knowledge. Prior to starting Foundations, you should have successfully completed a calculus-based microeconomics course and a statistics course (such as Statistics for Business Control & Regression/Forecasting Models). If you have not taken these classes (or if you are planning to take one or both concurrently) please email me and we can discuss things.

Grading policy

The departmental policy states: "To ensure fairness and clarity of grading, the Stern faculty has adopted a grading guideline for core courses with enrollment of more than 25 students, in which approximately 35% of students will receive an “A” or “A-” grade. In core courses of less than 25 students, the instructor is at liberty to give whatever grades he or she reasons the students deserve while maintaining rigorous academic standards." See the posted Finance Department grading policy.

Published Materials

Financial calculator

You'll need a financial calculator to work problems and quizzes. Suitable calculators include the HP 10bII+ or the TI BA II Plus. Older versions of these calculators should also be okay: anything in HP 10B or TI BA series should suffice. I don't recommend top-of-the line financial calculators such as the HP 17 or similar: the extra power comes with extra complexity.

Deliverables (planned, but subject to change)

Academic Integrity

Your academic conduct in this course is governed by the Stern Code of Conduct. Each of the deliverables will require you to sign or certify that, "I pledge my honor that I have not violated the NYU Stern Student Code of Conduct in the completion of this exam/problem set.”

Disability Disclosure Statement

Academic accommodations are available for students with disabilities. Please contact the Moses Center for Students with Disabilities (212-998-4980 or for further information. Students who are requesting academic accommodations are advised to contact the Moses Center as early as possible in the semester for assistance.

Class notes and recordings

I generally make class notes available online prior to class. I usually make class videos available after class. (This is on a "best efforts" basis. Technical problems sometimes arise. I can't guarantee availability.)

Course content and assignment dates (tentative).
BKM=Bodie, Kane and Marcus, Essentials of Investments; Meetings will either be (KMEC) 1-100 or Rem (Remote)

Session Day Dat1-100e Notes Content  


sets due
1 Wed 2-Sep  

Time value of money (TVM)

Mon 7-Sep Labor day
2 Wed 9-Sep   TVM
3 Mon 14-Sep   TVM
4 Wed 16-Sep   Markets BKM03
5 Mon 21-Sep   Markets
6 Wed 23-Sep   Returns BKM05  
7 Mon 28-Sep   Returns BKM05  
8 Wed 30-Sep   Portfolio choice BKM06   
9 Mon 5-Oct   Portfolio choice
10 Wed 7-Oct   Portfolio choice
11 Mon 12-Oct   Portfolio choice
12 Wed 14-Oct   Portfolio choice
13 Mon 19-Oct   CAPM BKM07  
14 Wed 21-Oct   CAPM
15 Mon 26-Oct   Efficiency BKM08  
16 Wed 28-Oct   Efficiency
17 Mon 2-Nov   Behavioral BKM09
18 Wed 4-Nov   Equity valuation BKM13
19 Mon 9-Nov   Equity valuation BKM13
20 Wed 11-Nov   Bonds BKM10
21 Mon 16-Nov   Yield Curve  
22 Wed 18-Nov   Dur/Imm BKM11
23 Mon 23-Nov   Options BKM15  
24 Wed 25-Nov   Options
25 Mon 30-Nov   Options BKM16
26 Wed 2-Dec   Options
27 Mon 7-Dec   Futures BKM17
28 Wed 9-Dec   Futures    
  Final Exam TBD