Finance Theory — 20.6: Valuing Any Financial Asset

Описание: Every financial asset — bonds, stocks, futures, and options — is a package of cash flows. This video shows how a single framework, present value, prices them all. The difference between asset classes comes down to one thing: how certain you are about getting paid.

Key concepts covered:
• Present value formula: discounting future cash flows by (1 + r)^t
• Perpetuities ($50/0.05 = $1,000) and annuities as building blocks
• Bond pricing: spot rates, forward rates, and yield-to-maturity
• Yield curve shapes: normal slope vs. inversion and recession signals
• Gordon Growth Model and the present value of growth opportunities (PVGO)
• Why high-PVGO stocks (tech) are more volatile than low-PVGO stocks (utilities)
• Futures vs. forwards: zero NPV at inception, daily mark-to-market vs. single settlement
• Option payoff asymmetry: the hockey-stick shape that changes pricing
• No-arbitrage pricing via replication: binomial model delta hedging example
• Market anomalies: size effect, January effect, momentum, accruals
• CAPM: Capital Market Line (total risk) vs. Security Market Line (beta)
• Beta as systematic risk — diversifiable risk earns no compensation
• The full hierarchy: PV framework with CAPM providing the discount rate
• Capital budgeting decision rule: positive NPV means accept, negative means reject

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SOURCE MATERIALS
The source materials for this video are from    • Ses 20: Efficient Markets III & Course Sum...