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Lesson 8 of 25

How a Long-Lived Institution Figures an Annual Budget Yield

In the 1990s, Yale discovered that it was faced with a deferred maintenance problem: the university hadn't properly planned for important renovations in many buildings. A large, one-time expenditure would be needed. How should Yale have covered these expenses? This lecture begins by applying the lessons learned so far to show why Yale's initial forecast budget cuts were overly pessimistic. In the second half of the class, we turn to the problem of measuring investment performance, and examine the strengths and weaknesses of various measures of yield, including yield-to-maturity and current yield.

Source: Open Yale Courses

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Yield Curve Arbitrage

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Financial Theory - Video Series

25 lessons

Lessons

1
Why Finance?
2
Utilities, Endowments, and Equilibrium
3
Computing Equilibrium
4
Efficiency, Assets, and Time
5
Present Value Prices and the Real Rate of Interest
6
Irving Fisher's Impatience Theory of Interest
7
Shakespeare's Merchant of Venice and Collateral, Present Value and the Vocabulary of Finance
8
How a Long-Lived Institution Figures an Annual Budget Yield
9
Yield Curve Arbitrage
10
Dynamic Present Value
11
Financial Implications of US Social Security System
12
Overlapping Generations Models of the Economy
13
Will the Stock Market Decline when the Baby Boomers Retire?
14
Quantifying Uncertainty and Risk
15
Uncertainty and the Rational Expectations Hypothesis
16
Backward Induction and Optimal Stopping Times
17
Callable Bonds and the Mortgage Prepayment Option
18
Modeling Mortgage Prepayments and Valuing Mortgages
19
Dynamic Hedging
20
Dynamic Hedging and Average Life
21
Risk Aversion and CAPM
22
The Mutual Fund Theorem and Covariance Pricing Theorems
23
Risk, Return, and Social Security
24
Leverage Cycle and the Subprime Mortgage Crisis
25
Shadow Banking: Parallel and Growing?
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