Financial Markets Lecture 1: Introduction

Introduction Brian Sullivan BA in Economics from The University of California at Berkeley MBA in Finance and Entrepreneurship from The University of Chicago Booth School of Business 15 years in Financial Service like JP Morgan Chase, HSBC, Bank of America and 3 start-ups

First Assignment Due in class Tell me about yourself – Name, age, when you graduate – What are your plans after graduation (work or more school)? – What kind of job do you want after graduating? – Where do you see yourself in 5 years? – What are your interests (like sports, movies, hobbies, etc.)

Course Description We will be using the book “Financial Markets and Institutions” by Fabozzi, Modigliani, et al. Finance is about technology – The first automobile engines probably were not very good, but overtime with the help of many people they became very good – Financial innovations are the same thing, we invent derivatives and it helped lead to the financial crisis in the USA

Course Description Finance is about technology (continued) – Technology can be dangerous Look at nuclear energy, a brilliant idea, but if you have a nuclear meltdown it can be harmful Same thing in finance, derivatives are a brilliant idea to reduce and spread risk, but they can be dangerous as has happened in the USA – Technology Improves over time Now engines are very good, airplanes are now safe, and nuclear reactors are relatively safe Same with finance, with the input of many people, this will improve overtime

Topics Financial products Efficient markets and behavioral finance The mortgage market and the financial crisis The assigned chapters in the book “Financial Markets and Institutions” by Fabozzi, et. Al.