Finance Track Map

Prerequisites

• Comfort with fractions, percentages, and simple algebra.
• Time Value of Money before discounting, DCF, fixed-income, swaps, or no-arbitrage pricing.
• Option Payoffs before no-arbitrage, binomial pricing, American options, forwards/futures, or Greeks.
• Two-Asset Portfolios before VaR/expected shortfall or the efficient frontier.

Fixed-Income

Build from discount factors and cash-flow timing to bond pricing, yield curves, DCF, and swaps under stated assumptions.

Prereqs: Start with Time Value of Money. For swaps, complete Yield Curve first.

1. The Time Value of Money Step by Step: Core discounting vocabulary and present-value arithmetic.
2. Fixed-Income Cash Flows Step by Step: Bond cash flows, price/yield mechanics, duration, and convexity.
3. DCF Valuation Step by Step: Cash-flow valuation under stated inputs, not a market recommendation.
4. The Yield Curve Step by Step: Discount-factor curves, bootstrapping, forwards, and par yields.
5. Interest-Rate Swaps Step by Step: Fixed and floating legs valued from the same stated curve.

Derivatives

Move from payoffs to replication, no-arbitrage prices, trees, early exercise, forwards, futures, and Greeks.

Prereqs: Start with Option Payoffs. Time Value of Money is needed for discounted prices and financing identities.

1. Option Payoffs Step by Step: Payoff shapes, combinations, profit versus payoff, and put-call parity.
2. No-Arbitrage Pricing Step by Step: Replication, state prices, and risk-neutral probabilities in small models.
3. Binomial Option Pricing Step by Step: Backward induction and risk-neutral valuation on exact trees.
4. American Options Step by Step: Early exercise and hold/exercise comparisons in a recomputed tree.
5. Forwards & Futures Step by Step: Forward prices, signed payoffs, carry, income, and marking to market.
6. Option Greeks Step by Step: Delta, gamma, and rebalancing from exact binomial-tree mechanics.

Portfolio-Risk

Connect weights, variance, distribution tails, and frontier geometry without turning model outputs into advice.

Prereqs: Start with Two-Asset Portfolios. Use VaR/ES for loss-distribution tail measures, then Efficient Frontier for risk-return geometry.

1. Two-Asset Portfolios Step by Step: Weights, return, variance, correlation, and diversification mechanics.
2. Value at Risk & Expected Shortfall Step by Step: Quantile thresholds and tail averages from a stated loss distribution.
3. The Efficient Frontier Step by Step: Feasible sets, dominated portfolios, the CML, and tangency under stated inputs.