Hi, welcome to week two. I wanted to give you some idea of what we did last week. And some idea of what we're going to do this week before we jump into the week. And I'll tend to do that all the time so that we are on the same page. So a recap of last week. I think the main things we spoke about are, can fall into two chunks. The first was the philosophy of the class, with content of the class. And I would like to again emphasize that although a lot of requirements and prerequisites could be there it's an applied field. It's borrows from so many disciplines and it's become almost a discipline of its own. We will try to do as much during the videos as possible so that you don't feel like you are in any way handicap by not having done one of the background courses. However, when I do reach a point where I think it's appropriate not to keep going, I will let you know. And at that point, what you'll realize is that you need to do x before you can do more of finance. But this is self-contained, I want to emphasize that. Then we moved on last week, we moved on to content because we have ten weeks and we got to keep moving. And I told you that a lot of what's going to happen in this class, is really work that you will do. That's my philosophy of teaching, is that I know a little bit I can motivate you to learn. I can show you why of things, and that's my job. But a lot of actual practice that you need to do in finance with real world problems has to happen at your end. So we will introduce everything with examples in the last week. This is what we did. We basically covered two issues, and the first, and I’ll just draw a timeline. And we started with something here, and I’ll, for the sake of just reference, draw just two, two points. And remember we started with one period and went on to two and more. But we carried this forward say, to something called future value. And then after recognizing that we also did what does the PV of something in the future look like? And as you can see from this, the future value turns out of this will be P which is the initial value times 1+r raised to power 2. Right? And that, two, can become n. And we got very familiar with going back and forth with all of this. So what is PV? Well, PV is pretty straightforward. It's the future value, in this case 1 + r raised to power 2. And you can recognize How similar the two are, one is like looking at yourself in a mirror. And that's what I like about finance, is it's very logical. I warn you again though, all the answers that you're going to get are wrong. [LAUGH] So the process is right, the answers are wrong. And the reason the answers are wrong is because you're worrying about the future, not the past. And for the time being, we're assuming there's no uncertainty. But I reminded you many times that at the back of your mind risk will always be there. And that's what's real, right? So because of risk, in some senses everything you calculate is wrong. But the process and the way of thinking and the framework is simply awesome. So I would encourage you to go back and do couple of things. Even before you proceed. First, and this I'll say every week even though it may become repetitive. I think it's important. It's all the more important because you are controlling your learning I'm not. In a classroom I have a lot more control, everybody's there and so on and so forth. But here you are in control and that's the way it should be right? And I'm hoping that online education forces the regular education to become individualized. As I said last time I feel frustrated sometimes that I cannot teach everybody the way they want to learn in a big classroom, because I'm doing it in real time. Hopefully, online can allow me to teach each person at a time. But that puts some pressure on you to perform. So, this is what I expect every week and I'll repeat it. And obviously you can ignore me. I mean this is your life, not mine. But it'll help especially in finance. So these are the couple of things you want to do. You want to make sure you understand the video. The good news is, you can go back and forth. But I will not provide resources specific to the video. Any resources available are standard textbooks, or I will give you specific formulas and so on I write up and put up on the website. And there are several reasons for this. And one is, fundamental reason is, I want you to learn actively. I think I spoke last time, if you're sitting there and just consuming which unfortunately is most of education, it's not learning in my book. For learning you want to be there. So, it's nothing says about humanity that you need to get up at seven and be in a class at eight. And then after that every two hours a bell rings and you have to change your mindset to learn something new. That's all artificial, it's like a factory. Humans are much more complicated and interesting, people. So I would encourage you to learn on your own. However, review the video and make your own notes from the video it will really help. Second every week we have assignments, and last week's assignments were a little bit easy because we didn't do that much. However you need to familiarize yourself with the assignment because finance is logical. So finance is not one day I say one thing and the next day I say something that's totally contradictory. Which by the way happens in life. People say so many things I'm, on the one hand on the second hand God gave us only two hands. But sometimes people make 15 different scenarios from the same issue. Finance keeps you disciplined so if you want to use the framework repeatedly you've got to do the problems. So last weeks problems you should have done by now. If not I would encourage you right now to stop watching the video and redo those assignments. Or do them again if you've done them in a fast fashion or not completely. Or if you haven't done them at all, do them. And then watch this video because it'll make your life easier. And I'll be happy. And remember, I can see, I can feel you. So, it's not something I'm saying in isolation. I mean it and I hope you take this advice.
