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0:00
Hello. My name is Tom Noe from
Oxford University
and I'm going to
talk to you today
about security design,
the question of what
securities firms
should issue to
finance investments.
0:13
I'm going to start by giving you
a basic introduction to what
the security design problem is.
0:20
This talk is going to
essentially consider
the optimal design of
financial securities.
What I'd like you to learn from
this talk is the
logic underlying
the basic finance models
of security choice
and security design.
Unfortunately, all things are
limited and my time is limited.
So, I'm not going
to be able to cover
all the technical details in
this literature it's a very
technical complex literature.
I'm not going to
be able to cover
all the extensions
of these models,
how you can extend
them to many periods,
how you can extend
them beyond for
profit firms to say
not for profit firms,
but you will understand
the logic of
the security design models
at the completion
of this lecture.
I'm very confident of that.
How are you going to learn
this? Well, you're going to
learn it because we're
going to cover in
a fair moderate
amount of detail,
a few very classic
example models
of security design from the
security design literature.
1:26
What is our question?
What is it we're going to
be talking about today?
Security design. What is that?
The question essentially
is: If a firm has
an investment opportunity
or an entrepreneur,
how should he finance the
investment opportunity?
What should he promise to
outside investors
in order to get
them to provide the funds
necessary to undertake
the investment?
That's the question we're
talking about today.
