Introduction to Asset Pricing Learn more

What is Asset Pricing?
Asset pricing or valuation is a financial term used to describe the process of estimating worth of financial items. The items that are usually priced include financial assets and liabilities. Financial assets include marketable securities such as stocks, business enterprises as well as intangible assets such as patents and trademarks. Liabilities, on the other hand, include bonds issued by firms and companies. There are number of reasons companies do valuations. These include, capital budgeting, investment analysis, financial reporting, merger and acquisition transactions and to determine the proper tax liability.
Who should take this course?
Owners of investment companies as well as those working in an investment bank, money-management firm or hedge fund are the prospective students to take this course. All those undergraduates who are curious about quantitative academic finance or considering graduate study in finance are also welcome.
Who can take this course?
Only those having finance and applied mathematics knowledge can take this course, since it uses concepts from finance, undergraduate level applied mathematics, undergraduate level advanced economics and time series econometrics. Furthermore, participants of this course should be able to use single and multivariable calculus, simple differential equations, matrix algebra, and basic statistics.
What are the benefits of this course?
This course will help you understand mathematical models for quantitative finance in a much better way. By taking this class you will also get to know what buzzwords like beta, risk premium, risk-neutral price, arbitrage, and discount factor mean. In short, it is an introductory course help you understand how to use the theory and connect it to empirical facts.
Table of Contents:
- Introduction to Continuous Time Stochastic Models
- Introduction and Overview, Challenging Facts and Basic Consumption-Based Model
- Classic issues in Finance; Equilibrium, Contingent Claims, Risk-Neutral Probabilities
- State-Space Representation, Risk Sharing, Aggregation, Existence of a Discount Factor
- Mean-Variance Frontier, Beta Representations, Conditioning Information
- Factor Pricing Models, Value Premium, the Fama-French model
- Options and Bonds, Relative Pricing in Action, Term Structure Definitions
- Term Structure Models
- Portfolio Theory
Author Bio:
This course has been prepared by John H. Cochrane, professor of finance at the University of Chicago Booth School of business.

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