文档介绍：INTRODUCTION TO FINANCIAL ENGINEERING
© Fred Song
September 2001
1
Introductory
What is Finance?
What is Financial Engineering?
What’s the role of Financial Engineering
in New Economy?
New economy
Financial engineering and merce
2
What is Finance?
Money & Banking —
ary Economics
International Finance —
International Economics
3
Corporate Finance
Capital Market
(Investments)
Financial Economics
Multinational Corporate Finance
International Financial Market
Financial Engineering
4
What is Financial Engineering?
Generalizing: Financial Engineering
involves the design, the development, and
the implementation of innovative financial
instruments and processes, and the
formulation of creative solutions to
problems in finance.
Specializing: Financial Engineering is risk
management via creative structural tools.
5
FINANCE
.
ENGINEERING
.
6
CHAPTER ONE: MM Theory and No Arbitrage
MM Theory
Two measurements of value
Accounting: book value — historic cost
Finance: market value — net present value
7
Assets = Liabilities + Equity
Accounting Equality: duel entity system
Book value measurement
Fund use
Fund source
Finance Equality: Fund use = Fund source
Market value measurement
8
Corporate Finance
Assets Liabilities and Equity
Asset 1
Asset 2 Liabilities
Asset 3
.
. Equity
.
Asset n
Total Assets Total Liabilities and Equity
Accounting: Yes!
Finance: No!
Capital Market
Real Economy
NPV
Firm Value
+ NPV
9
Liabilities Value
Equity Value
Liabilities Value
Assets Value
Capital Structure
Financial leverage:
or
Has a change of financial leverage any impact on the firm value?
10