1. Financial Market Theory
Tuesday, November 7, 2017
Professor Edwin T Burton

2. Further Issues in Asset-Backed
Review of ABS essentials
Different forms of ABS
CBO –where the pool consists of bonds
CDO –where the pool consists of debt
CLO – where the pool consists of bank loans
CMBS – where the pool consists of commercial real estate loans
Use of credit enhancements
Implications for the 2008 financial crisis
Transparency issues
Use of independence assumption
November 7, 2017

3. Review for 2nd Mid-Term
All lectures from September 12th through October 19th
Readings: Chapters 7 through 13 in ‘textbook’
Power point presentations from September 12th through October 19th
Primary emphasis: Modern Portfolio Theory
Markowitz, Tobin and CAPM
Applications of CAPM
Finite State Theory
Lectures after October 19th will not be included on the exam. Chapters after chapter 13 will not be included. Power point presentations after October 19th will not be included on the exam. These materials will be covered on the final exam.
November 7, 2017