Finance Theory I - Hour 10
This post marks my first ten hours of the MIT OCW course "Finance Theory I." Actually, it was probably more than ten, since I only started recording after watching several lecture videos. Those were the introduction video and three videos on present value. After watching those, I read two chapters of the accompanying textbook. The first was on present value, and the second was on bonds. Through all this, I learned how present value relates to future value; how to price perpetuities and annuities; how compounding is quoted and calculated for different intervals; how continuous compounding works; what bonds are; how face value, coupon rate, and yield to maturity factor into the pricing of a bond; how the duration of a bond affects its sensitivity to a change in yield; how present and future spot rates relate to bond prices; and how real and nominal discount rates relate through inflation. I completed all the self-test questions in those textbook chapters, and I further completed questions 1-11 of the OCW problem set. I found the lecture videos to be very engaging, in major part due to the professor. Reading the textbook was just fine. Even without an end goal for the knowledge, I like knowing more about how modern money works, but the problems aren't terribly engaging. It was overall mildly pleasant.