**Introduction**

- Finance as time-travelling retail
- Financial derivatives, payoff functions and portfolios: motivation

Time dependence of the payoff function

**Risk**

Efficient frontier, Black-Scholes

**Arbitrage**

https://www.lesswrong.com/posts/CzbvB4dsLNzLzeeot/consequences-of-arbitrage-expected-cash

Fundamental questions to figure out

Fundamental questions to figure out

- Betting markets, prediction markets
- Effect of trading fees on prices/probabilities
- Value of stocks, money decided by network effects? But then why tends to reflect real value?
- Is consumption equal to income in the long run?
- Is stock dilution a thing? How is it different from money printing? [1]
- How exactly does a stock work? Where do profits go? What happens if company reinvestst them?
- When a government sells debt, does that increase liquidity? If so, then QE is just a swap that doesn't actually add liquidity? Does it matter if the debt sold by government is tradeable or not (since anything can be traded with swaps)?
- But then does
*private*debt also increase liquidity? Of course not, right? But what exactly is the governmental power of a central bank? And isn't the value in your bank account also part of the money supply? - Is consumption equal to income "in the long run"?
- Is money neutral?
- Does stimulus work? What is its effect on GDP? What is its effect on stock prices?

Questions about assets and derivatives

- Bid-ask spread? What does a market maker do?
- What are all these divisions in an investment bank? What is the "fundamental" relationship between them?
- What is PPP?
- Why trade forwards/futures rather than invest directly?
- Are payoff diagrams all that matter? Futures/forwards
- Why not just bet? Why derivatives?
- Think about how incentives set by payoffs add efficiency to the market -- esp. straddle,
- Payoffs for futures, swaps, etc.
- Hedging -- division? Multi-asset?
- Can
*any*derivative be constructed? Something-something Turing completeness

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