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Teaching Finance with AI

Julius and the Democratization of Coding

AI Overview

The world is aware that generative AI has made coders more efficient, but I don’t know if there is as much recognition of the more important fact that gen AI has made coding…

Online Data

Finance

Python Tools

We can upload files to Julius as with other chatbots. We can then chat about the data with the benefit of python. In fact, Julius.ai started life as the “Chat with Your…

Data Visualization

Python Tools

Python has very versatile plotting libraries. The primary libraries are matplotlib and seaborn, but there are others - for example, plotly and other libraries create…

CAPM

Finance

Calculating betas is an easy exercise to do with Julius. We can also estimate the market risk premium, and we can get the risk-free rate from FRED, so we can estimate the…

Building Stuff

Python Tools

A big advantage of coding (and using AI to write code) is that things can be automated. A student this spring told me that a friend of his in the finance industry had just…

Prompt Engineering (or Not)

AI Overview

I use Menti surveys periodically to ask students what they would like to learn more about, and how to write effective prompts frequently shows up. In the first bit of time…

Creating Apps

Python Tools

After the last session of my class in the spring, a student came up to me and said “I want to thank you. I never knew anything about programming, and now I can create apps.…

Simulation

Finance

Simulation can be done in a spreadsheet but is better done elsewhere. An easy example of the AI + coding approach is to simulate a retirement plan.

Mean-Variance Frontier

Finance

Mean-variance optimization is one of those topics that has always been awkward to teach with spreadsheets. It is messy to define the portfolio variance in a spreadsheet for…

API Calls

AI Overview

This HBS case, about implementing generative AI at Deloitte Canada, is a useful tool for teaching the benefits, risks, and strategies of implementing AI in a corporate…

Jensen’s Alpha

Finance

“Alpha” in this post will mean the CAPM alpha, that is, the intercept in the CAPM regression. It was first used to measure mutual fund performance by Michael Jensen, and…

Fama-French Factors

Finance

The CAPM is intuitively reasonable and is widely used by companies to estimate their cost of capital, but it is well known to do a poor job of explaining average returns. I…

Web Scraping

Python Tools

Getting data from websites is a task for which “AI + coding” can really increase efficiency. I use two examples to illustrate web scraping. The first is to extract a table…

Capital Budgeting

Finance

Spreadsheets are perfectly suited for capital budgeting exercises. Those exercises involve a minimal amount of data (data = assumptions mostly) and only basic arithmetic…

Form 4’s from EDGAR

Finance

This past spring, while Tesla was in the midst of a 50% freefall, the news media reported that Tesla insiders had been selling shares. Here, “insiders” means individuals…

The Ultimate Tech Stack for Researchers

Python Tools

Today, I’m departing from my usual topic of teaching and instead am going to discuss tools for researchers. I’m going way out on a skinny limb by claiming I know the best…