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FIN415 Week 4 Slides Modeling
A Painting is a Model
Artists use Color to Create a Model
We use Mathematical Entities
Movement through Time ,[object Object],[object Object],[object Object],[object Object]
FV Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
PV Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Payment ,[object Object]
Example of Payment ,[object Object],[object Object],[object Object]
Perpetuity ,[object Object],[object Object],[object Object],[object Object]
Example of a Perpetuity ,[object Object],[object Object]
Annuity ,[object Object],[object Object],[object Object]
Example of Annuity ,[object Object],[object Object],[object Object],[object Object]
Example of Annuity Continued ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Bond ,[object Object],[object Object]
Bond Equation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Net Present Value (NPV) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Annuity with NPV ,[object Object],[object Object]
Bond with NPV ,[object Object],[object Object]
Gordon Growth Model ,[object Object],[object Object],[object Object],[object Object]
Growing Business ,[object Object],[object Object],[object Object]
Terminal Value ,[object Object],[object Object],[object Object]
Estimating Cash Flows ,[object Object],[object Object],[object Object],[object Object]
Valuing Equity ,[object Object],[object Object],[object Object]
Discount Rate ,[object Object],[object Object]
Capital Asset Pricing Model ,[object Object],[object Object]
CAPM
Risk Free Rate ,[object Object],[object Object],[object Object],[object Object]
Average Market Return ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Beta  β ,[object Object],[object Object],[object Object]
Risk = Volatility ,[object Object],[object Object],[object Object]
β
Example of  β ,[object Object],[object Object],[object Object],[object Object],[object Object]
Risk Premium ,[object Object],[object Object],[object Object],[object Object],[object Object]
Risk Premium on Valued Asset ,[object Object],[object Object],[object Object],[object Object]
Example of CAPM ,[object Object],[object Object],[object Object],[object Object],[object Object]
Option Pricing Models ,[object Object],[object Object],[object Object]
Binomial Option Pricing Model ,[object Object],[object Object],[object Object],[object Object]
Binomial Option Pricing Model
Black-Scholes ,[object Object],[object Object],[object Object],[object Object],[object Object]
Black-Scholes
Monte Carlo Simulations
Monte Carlo Simulations ,[object Object],[object Object],[object Object]
How Does Your Mind Model the World? ,[object Object],[object Object],[object Object]

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Fin415 Week 4 Slides