Introduction to Finance: The Role of Financial Markets

Go to Course: https://www.coursera.org/learn/introduction-to-finance-the-role-of-financial-markets

Introduction

### Course Review: Introduction to Finance: The Role of Financial Markets on Coursera #### Overview The world of finance can often feel like a labyrinth of complex terminology and intricate concepts. "Introduction to Finance: The Role of Financial Markets," offered on Coursera, demystifies the basics of financial management, making it accessible to beginners and invaluable for aspiring finance professionals. By taking this course, learners will gain crucial insights into financial markets, enabling them to make more informed decisions regarding capital investments and understand the nuances of risk and return. #### Course Highlights 1. **Comprehensive Structure**: The course begins with a clear orientation that sets the stage for the modules that follow. Each module builds upon the previous one, introducing new concepts while reinforcing the foundational knowledge necessary for finance management. 2. **In-Depth Modules**: The course is structured into four detailed modules: - **Bond Valuation**: Participants learn to value both level-coupon and zero-coupon bonds, grasping essential terms like maturity, yields, and ratings. This module also covers the roles of various players in the bond market, an important aspect for understanding real-market dynamics. - **Stock Valuation**: This segment dives into how companies issue stocks and the differences between common and preferred stocks. Learners gain practical skills to access real-time stock information, preparing them for actual market scenarios. - **Capital Budgeting**: This module equips students to evaluate cash flows relevant to capital budgeting and understand critical factors like after-tax values and inflation. It culminates in a holistic view of a company's investment decision-making process, essential for strategic financial management. - **Risk and Return**: Here, learners explore the historical relationship between risk and returns across different instruments. The emphasis on the trade-off concept helps aspiring investors align their expectations with their risk appetite, a critical skill in the investment space. 3. **Real-World Applications**: The focus on practical skills and real-world applications makes this course particularly valuable. The insights acquired are not just theoretical; they are directly applicable to finance-related challenges encountered in the professional sphere. #### Learning Outcomes By the end of this course, students will: - Understand the structure and dynamics of financial markets. - Be able to appraise the fundamentals of bond and stock valuation. - Possess the skills to engage in capital budgeting decisively. - Be equipped to assess and navigate the complexities of risk and return in investment decisions. #### Recommendations "Introduction to Finance: The Role of Financial Markets" is a highly commendable course for anyone looking to step into the finance world or enhance their financial literacy. It's well-suited for students, early career professionals, or even seasoned professionals looking to refresh their knowledge. - **For Beginners**: If you have little to no background in finance, this course offers a structured environment to learn essential concepts from the ground up. - **For Professionals**: Even if you have some experience, the practical insights and structured approach can help reinforce and expand your understanding of financial concepts critical in today’s fast-paced economic environment. - **Flexibility**: Available on Coursera, this online course allows you to learn at your own pace, making it easy to fit into a busy schedule. In conclusion, whether you're aiming to enhance your skills for a current job, pivot to a new career in finance, or simply understand how financial markets function, this course is a worthy investment. The knowledge gained will serve as a solid foundation for making well-informed financial decisions in the future. Don’t miss the opportunity to elevate your finance acumen with this comprehensive introduction!

Syllabus

Course Orientation

In this course, you will be introduced to the basic concepts and skills needed for financial managers to make informed decisions. With an overview of the structure and dynamics of financial markets and commonly used financial instruments, you will get crucial skills to make capital investment decisions. With these skills, you will be ready to understand how to measure returns and risks, and establish the relationship between these two. The focus of this course is on basic concepts and skill sets that will have a direct impact on real-world problems in finance. The course will enable you to understand the role of financial markets and the nature of major securities traded in financial markets. Moreover, you will gain insights into how to make use of financial markets to create value under uncertainty.

In this module, you will be introduced to basic terms of bonds: coupons, face value, coupon rate, maturity, and yield to maturity. You will be presented with the ways to value level-coupon bonds and zero-coupon bonds. You will learn why companies would like to have their bonds rated, and what the factors are that determine the bond ratings. You will also identify the structure of bond market and the major players of the bond market.

In this module, you will learn the basics of stock valuation. You will be presented with the fundamentals of stock market structure, and how companies issue stocks in the market. In addition to that, you will explore the different types of stocks, including common stocks and preferred stocks. You will also identify/find how to get real-time information of individual stocks, and how to read stock quotes.

This module is the application of the capital budgeting process. First, you will learn/encounter/see/be exposed to some common scenarios when we evaluate which cash flow should be accounted for in the capital budgeting analysis. Then, you will be introduced to the treatment of after-tax salvage value and accelerated depreciation schedule. This information will be combined to determine whether a project is worthwhile to explore or not. You will also discuss the impact of inflation on capital budgeting decisions. As a result, this module will help you establish a big picture of the company’s investment decisions.

In this module, you will review the historical record of return and risk for major categories of financial instrument, and reveal that there exists a trade-off between risk and return. You will also learn how to calculate return and risk based on the real data collected from financial markets. The trade-off between risk and return reveals that investors should set reasonable expectations of return based on their risk preferences.