Quantitative Methods in Finance
Learn the fundamentals of quantitative techniques essential in finance
This course teaches the fundamentals of quantitative techniques essential in financial analysis. .
The course starts with concepts and techniques of time value of money which are a fundamental tool for financial analysis, corporate finance, valuation, and other investment decisions. We then introduce descriptive statistics that provides essential tools for describing and evaluating return and risk.
Furthermore, the course introduces some of the discrete and continuous probability distributions most commonly used to describe the behavior of random variables. We then move to probability theory and calculations that are widely used in finance, for example, in the field of investment and project valuation and in financial risk management. Probability theory concepts are needed to understand investment decisionmaking under conditions of uncertainty.
Then we explain how to estimate different parameters (e.g., mean and standard deviation) of a population if only a sample, rather than the whole population, can be observed. Hypothesis testing is a closely related topic. Finally, the course presents techniques that are used to accept or reject an assumed hypothesis (null hypothesis) about various parameters of a population.
Class Curriculum

StartIntroduction to Time Value of Money

StartInterest Rates

StartInterest Rate Equation

StartEffective Annual Rate

StartTime Value of Money for Different Compounding Frequencies

StartFuture Value and Present Value of a Single Cash Flow

StartFuture Value and Present value of Annuities

StartCalculating Present Value and Future Value of Annuities with Different Compounding Frequencies

StartUsing a Timeline

StartNet Present Value (NPV) and Internal Rate of Return (IRR)

StartConflict Between NPV and IRR (And Problem with IRR)

StartHolding Period Return (Total Return)

StartMoneyweighted and Timeweighted Rates of Return of a Portfolio

StartAnnualized Returns

StartYield Measures for Money Market Instruments

StartConvert One Yield to Another

StartDescriptive Vs. Inferential Statistics

StartTypes of Measurement Scales

StartParameter, Sample Statistic, and Frequency Distribution

StartRelative Frequencies and Cumulative Relative Frequencies

StartProperties of a Data Set (Histogram / Frequency Polygon)

StartMeasures of Central Tendency  Arithmetic Mean

StartWeighted Average Mean

StartGeometric Mean

StartHarmonic Mean

StartMedian and Mode

StartQuartiles, Quintiles, Deciles, and Percentiles

StartRange, Mean Absolute Deviation, Variance, Standard Deviation

StartChebyshev’s Inequality

StartCoefficient of Variation and Sharpe Ratio

StartSkewness

StartRelative Locations of Mean, Median and Mode

StartSample Skewness and Kurtosis
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