Introduction to Finance and Statistics

This module provides an introduction to the fundamentals of finance and statistics.

By the end of this module the student should be able to:

1. Demonstrate an understanding of the fundamentals of statistics and its application using statistical software.
2. Demonstrate an understanding of the concept of time value of money and its application to bonds and equities.
3. Comprehend the fundamental aspects of the relationship between risk and return.

1 Introduction to Statistics (Business Analytics)

In these lectures we will introduce business analytics. First, we will provide examples of the broad categories of techniques used in business analytics and identify and describe diverse types of data. Then, we will construct and interpret frequency distributions.

2 Descriptive Statistics

In these lectures, we will calculate measures of location and variability. In addition, we will analyse and calculate measures of association.

3 Visualizations

In these lectures, we will explore data visualization using Excel. First, we will discuss the best practice for both tables and charts. Second, we will explain how to produce crosstabulations using Pivot Tables. Third, we will illustrate some of the main charts that Excel offers for displaying information. And finally, we will construct and interpret statistical charts.

4 Probability and Probability Distributions

In these lectures we will focus on probability. First, we will discuss how can we use it to tackle uncertainty. Second, we will explain some basic relationships of probability and explore the Addition Law, the concept of conditional probability and explore the Multiplication Law. And finally, we will introduce some widely used probability distributions.

5 Time Value of Money

In these lectures, we will study the time value of money (TVM). We will illustrate why money has a higher value today than in the future. We will also develop a set of tools that we will use throughout the rest of the module. We will start analysing single cash flows and then we will move onto annuity cash flows.

6 Bond Valuation

In these lectures, we will learn what bonds are, how to price them and why they are important to the firm.

7 Stock Valuation

In these lectures, we will learn what stocks are, how to price them and why they are important to the firm. In addition, we will look at the main stock markets in the world.

8 Risk and Return

In these lectures, we will introduce portfolio theory by learning how to characterise and estimate risk and return.