This lecture explores behavioral finance, why people avoid uncertainty, the link between rationality and human emotion, and human preferences for decision-making. Discussion and simulations frame the adaptive markets hypothesis and its implications.
This lecture presents the limitations of CAPM and the practical implications of the adaptive markets hypothesis. The latter part of lecture is a summary of the entire course and a recap of key concepts.
This lecture presents applications of the NPV rule and project financing, as well as alternatives to NPV. In the latter half, an overview of the theory of market efficiency and the example of the Space Shuttle Challenger disaster are presented.
This lecture starts with an example that uses CAPM to explain market-cap portfolios. The focus then shifts to making financial decisions as a manager, including applying the NPV rule and calculating project cash flows.