Analysis of Financial Institutions and Financial Instruments

1.5 units

The main goal of the course is to give you an in-depth understanding of how financial reports provide unusually accurate and detailed (but not perfect) information about the risks and performance of firms in the financial services industries. These firms' financial statements increasingly are based on fair value accounting and their financial reports typically include extensive risk and estimation sensitivity disclosures. Both fair value accounting and risk and estimation sensitivity disclosures are necessary ingredients for financial reports to convey the risk and performance of financial services firms in today's world of complex, structured, and risk-partitioning financial instruments and transactions. While financial services firms often apply fair value accounting and risk and estimation sensitivity disclosures imperfectly (or worse), careful joint analysis of the information they do provide invariably yields important clues about their risks and performance.