The Big Ideas in Finance

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The finance industry provides services that most people need but only few understand. Financial products are complex, the services are inherently opaque, and conflicts of interest are common. Consequently, finance is seen as one of the most intimidating subjects there is, mathematically intensive, difficult to understand, and appreciate. However, finance is one of the most intellectually coherent disciplines in business. There are only six essential paradigms and every topic in finance draws on one or more of these paradigms. Five of these six paradigms have won their originators Nobel Prizes. In this series, I cover each idea in one lecture to show how they all fit together and why each idea was considered important enough for its originator to win a Nobel prize. These six ideas help you to understand that at its core, finance is really not that difficult. Without the math-heavy background, the concepts are intuitive and easy to understand. For laypersons, understanding how finance approaches a subject is to help them understand how financial products are written, priced, and sold.

In this series