Principles of Finance: Arbitrage and Valuation

This lecture covers the principles of finance, focusing on arbitrage opportunities and the law of one price. It explains how to take advantage of price differences in different markets without risk. The concept of valuing assets in a portfolio is also discussed, using examples to illustrate the application of the law of one price. Additionally, the lecture delves into the importance of net present value (NPV) in decision-making, showcasing how to evaluate investment opportunities based on their NPV. Various financial concepts such as discounted cash flow, value additivity, and project valuation are explored in detail.