Utility Functions. Investment Risk. Mean-Variance Portfolio Theory, Single- and Multi-Factor
Models of Asset Returns. Equilibrium Asset Pricing Models. Efficient Markets Hypothesis. Stochastic
Models for Security Prices. Geometric Brownian Motion, Stochastic Differential Equations. The Ito
Integral v The Ito Formula. Diffusion and Mean-Reverting Processes. Option Valuation. Arbitrage.
Complete Markets. Valuation of a Forward Contract for Option Prices. Put-Call Parity. Option
Valuation Using Binomial Trees and Lattices. Option Valuation Using the Black-Scholes. The Greeks
for an Option. Term Structure of Interest Rates. Credit Risk.
