Financial theory: View the Yale course on YouTube

Okay, some of you will look at this blog post and nominate it as the boringest blog post of the year. But not me! I love this stuff! Here are 26 Financial Theory (ECON251) classes from Yale, along with a “table of contents” from each video.

FINANCIAL THEORY

ECON251 Financial Theory with John Geanakoplos
Download the course material for this course at Yale’s Open Course site.

Lecture 1: Why Finance?
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Course Introduction
10:16 – Chapter 2. Collateral in the Standard Theory
17:54 – Chapter 3. Leverage in Housing Prices
33:47 – Chapter 4. Examples of Finance
46:13 – Chapter 5. Why Study Finance?
50:13 – Chapter 6. Logistics
58:22 – Chapter 7. A Experiment of the Financial Market

Lecture 2: Utilities Endowments and Equilibrium
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction
07:04 – Chapter 2. Why Model?
13:30 – Chapter 3. History of Markets
24:41 – Chapter 4. Supply and Demand and General Equilibrium
37:59 – Chapter 5. Marginal Utility
45:20 – Chapter 6. Endowments and Equilibrium

Lecture 3: Computer equilibrium
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction
02:48 – Chapter 2. Welfare and Utility in Free Markets
16:52 – Chapter 3. Equilibrium amidst Consumption and Endowments
32:43 – Chapter 4. Anticipation of Prices
52:53 – Chapter 5. Log Utilities and Computer Models of Equilibrium

Lecture 4: Efficiency, Assets and Time
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Is the Free Market Good? A Mathematical Perspective
11:20 – Chapter 2. The Pareto Efficiency and Equilibrium
38:42 – Chapter 3. Fundamental Theorem of Economics
46:27 – Chapter 4. Shortcomings of the Fundamental Theorem
52:39 – Chapter 5. History of Mathematical Economics
01:00:21 – Chapter 6. Elements of Financial Models

Lecture 5: Present Value and the Real Rate of Interest
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Implications of General Equilibrium
03:08 – Chapter 2. Interest Rates and Stock Prices
22:06 – Chapter 3. Defining Financial Equilibrium
33:41 – Chapter 4. Inflation and Arbitrage
43:35 – Chapter 5. Present Value Prices
57:44 – Chapter 6. Real and Nominal Interest Rates

Lecture 6: Irving Fisher’s Impatience Theory of Interest
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. From Financial to General Equilbrium
06:44 – Chapter 2. Applying the Principle of No Arbitrage
23:50 – Chapter 3. The Fundamental Theorem of Asset Pricing
39:25 – Chapter 4. Effects of Technology in Fisher Economy
51:31 – Chapter 5. The Impatience Theory of Interest
01:06:48 – Chapter 6. Conclusion

Lecture 7: Shakespeare’s Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction
01:23 – Chapter 2. Contracts in Merchant of Venice
20:23 – Chapter 3. The Doubling Rule
36:07 – Chapter 4. Coupon Bonds, Annuities, and Perpetuities
54:24 – Chapter 5. Mortgage
59:15 – Chapter 6. Applications of Financial Instruments

Lecture 8: How a Long-Lived Institution Figures an Annual Budget. Yield
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Yale’s Budget Set
03:37 – Chapter 2. Analysis of Yale’s Expenditures and Endowment
31:51 – Chapter 3. Yield to Maturity and Internal Rate of Return
51:52 – Chapter 4. Assessing Performance of Coupon Bond

Lecture 9: Yield Curve Arbitrage
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Defining Yield
09:07 – Chapter 2. Assessing Market Interest Rate from Treasury Bonds
35:46 – Chapter 3. Zero Coupon Bonds and the Principle of Duality
50:31 – Chapter 4. Forward Interest Rate
01:10:05 – Chapter 5. Calculating Prices in the Future and Conclusio

Lecture 10: Dynamic Present Value
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Dynamic Present Values
08:49 – Chapter 2. Marking to Market
39:53 – Chapter 3. Mortgages and Backward Induction
50:42 – Chapter 4. Remaining Balances and Amortization
54:52 – Chapter 5. Weaknesses in the U.S. Social Security System

Lecture 11: Social Security
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction
03:53 – Chapter 2. The Development of the U.S. Social Security System
19:16 – Chapter 3. Economic Imbalances in Social Security
38:48 – Chapter 4. Root Causes of Income Transfer in Social Security
01:05:21 – Chapter 5. Privatization of U.S. Social Securit

Lecture 12: Overlapping Generations Models of the Economy
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction to the Overlapping Generation Model
12:59 – Chapter 2. Financial and General Equilibrium in Social Security
26:37 – Chapter 3. Present Value Analysis of Social Security
59:24 – Chapter 4. Real Rate of Interest and Social Securit

Lecture 13: Demography and Asset Pricing: Will the Stock Market Decline when the Baby Boomers Retire?
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Stationarity and Equilibrium in the Overlapping Generations Model
16:38 – Chapter 2. Evaluating Tobin’s Thoughts on Social Security
35:07 – Chapter 3. Birth Rates and Stock Market Levels
01:02:30 – Chapter 4. Philosophical and Statistical Framework of Uncertainty

Lecture 14: Quantifying Uncertainty and Risk
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Expectation, Variance, and Covariance
19:06 – Chapter 2. Diversification and Risk Exposure
33:54 – Chapter 3. Conditional Expectation
53:39 – Chapter 4. Uncertainty in Interest Rates

Lecture 15: Uncertainty and the Rational Expectations Hypothesis
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. The Rational Expectations Hypothesis
12:18 – Chapter 2. Dependence on Prices in a Certain World
24:42 – Chapter 3. Implications of Uncertain Discount Rates and Hyperbolic Discounting
46:53 – Chapter 4. Uncertainties of Default

Lecture 16: Backward Induction and Optimal Stopping Times
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Calculating Default Probabilities
14:58 – Chapter 2. Relationship Between Defaults and Forward Rates
28:09 – Chapter 3. Zermelo, Chess, and Backward Induction
36:48 – Chapter 4. Optimal Stopping Games and Backward Induction
01:06:47 – Chapter 5. The Optimal Marriage Problem

Lecture 17: Callable Bonds and the Mortgage Prepayment Option
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction to Callable Bonds and Mortgage Options
12:14 – Chapter 2. Assessing Option Value via Backward Induction
42:44 – Chapter 3. Fixed Rate Amortizing Mortgage
57:51 – Chapter 4. How Banks Set Mortgage Rates for Prepayers

Lecture 18: Modeling Mortgage Prepayments and Valuing Mortgages
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Review of Mortgages
03:20 – Chapter 2. Complications of Refinancing Mortgages
19:26 – Chapter 3. Non-contingent Forecasts of Mortgage Value
28:40 – Chapter 4. The Modern Behavior Rationalizing Model of Mortgage Value
54:07 – Chapter 5. Risk in Mortgages and Hedging

Lecture 19: History of the Mortgage Market: A Personal Narrative
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Fannie Mae, Freddie Mac, and the Mortgage Securities Market
17:01 – Chapter 2. Collateralized Mortgage Obligations
22:44 – Chapter 3. Modeling Prepayment Tendencies at Kidder Peabody
35:40 – Chapter 4. The Rise of Ellington Capital Management and the Role of Hedge Funds
52:52 – Chapter 5. The Leverage Cycle and the Subprime Mortgage Market
01:13:51 – Chapter 6. The Credit Default Swap
01:18:36 – Chapter 7. Conclusion

Lecture 20: Dynamic Hedging
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Fundamentals of Hedging
15:38 – Chapter 2. The Principle of Dynamic Hedging
24:26 – Chapter 3. How Does Hedging Generate Profit?
43:48 – Chapter 4. Maintaining Profits from Dynamic Hedging
54:08 – Chapter 5. Dynamic Hedging in the Bond Market
01:10:30 – Chapter 6. Conclusion

Lecture 21: Dynamic Hedging and Average Life
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Review of Dynamic Hedging
09:15 – Chapter 2. Dynamic Hedging as Marking-to-Market
19:55 – Chapter 3. Dynamic Hedging and Prepayment Models in the Market
30:50 – Chapter 4. Appropriate Hedges against Interest Rate Movements
01:05:15 – Chapter 5. Measuring the Average Life of a Bon

Lecture 22: Risk Aversion and the Capital Asset Pricing Theorem
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Risk Aversion
03:35 – Chapter 2. The Bernoulli Explanation of Risk
12:38 – Chapter 3. Foundations of the Capital Asset Pricing Model
22:15 – Chapter 4. Accounting for Risk in Prices and Asset Holdings in General Equilibrium
54:11 – Chapter 5. Implications of Risk in Hedging
01:09:40 – Chapter 6. Diversification in Equilibrium and Conclusio

Lecture 23: The Mutual Fund Theorem and Covariance Pricing Theorems
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. The Mutual Fund Theorem
03:47 – Chapter 2. Covariance Pricing Theorem and Diversification
25:19 – Chapter 3. Deriving Elements of the Capital Asset Pricing Model
40:25 – Chapter 4. Mutual Fund Theorem in Math and Its Significance
52:36 – Chapter 5. The Sharpe Ratio and Independent Risks
01:04:19 – Chapter 6. Price Dependence on Covariance, Not Variance

Lecture 24: Risk, Return, and Social Security
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Testing the Capital Asset Pricing Model
14:08 – Chapter 2. Evaluation of Fund Management Performance Using CAPM
22:30 – Chapter 3. Reassessing Assets within Social Security
53:04 – Chapter 4. Reconciling Democratic and Republican Views on Social Security
59:32 – Chapter 5. Geanakoplos’s Personal Annuitized Average Wage Securities
01:08:48 – Chapter 6. The Black-Scholes Model

Lecture 25:The Leverage Cycle and the Subprime Mortgage Crisis
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Assumptions on Loans in the Subprime Mortgage Market
18:27 – Chapter 2. Market Weaknesses Revealed in the 2007-2009 Financial Crisis
29:00 – Chapter 3. Collateral and Introduction to the Leverage Cycle
38:53 – Chapter 4. Contrasts between the Leverage Cycle and CAPM
43:36 – Chapter 5. Leverage Cycle Theory in Recent Financial History
01:03:55 – Chapter 6. Negative Implications of the Leverage Cycle
01:14:14 – Chapter 7. Conclusion

Lecture 26: The Leverage Cycle and Crashes
[Click here and the video will open in a new window]
Video contents:
00:00 – Chapter 1. Introduction
02:15 – Chapter 2. Understanding Leverage
13:45 – Chapter 3. Supply and Demand Effects on Interest Rates and Leverage
21:52 – Chapter 4. Impatience and Volatility on Setting Leverage
34:48 – Chapter 5. Bad News, Pessimism, Price Drops, and Leverage Cycle Crashes
48:01 – Chapter 6. Can Leverage Be Monitored?

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