Options, Future & Derivatives

4.0 credits

This course provides students with an understanding of the wide range of financial derivatives, including options, forwards, futures & swaps. Financial derivatives are an innovative part of capital markets that are being integrated into almost all aspects of finance (capital markets, corporate finance, banking, real estate financing). We will consider carefully the financial contract underlying each derivative, theories of pricing the derivative and complex strategies involving combining derivatives with other financial assets for the purpose of investing, hedging and/or arbitrage. Specific areas of finance where we will study derivatives are stocks, bonds, interest rates, exchange rates, market volatility and new markets (cryptocurrencies). Throughout the course, students will be required to do mathematical calculations such as game trees, simulations and statistical estimation. Some familiarity with Excel and computer programming helpful.