Financial Derivatives

Module code: EC7076
Module co-ordinator: Dr Svetlana Andrianova

Financial derivatives are vital tools in modern portfolio management. Derivatives are contracts which give the holder the right or obligation to trade an asset in the future at a price agreed today. They have been described as weapons of financial mass destruction. Understanding how these products work and how they are priced is a key component in managing risk and making money in financial markets.

Topics covered

  • Pricing and hedging with forwards and futures
  • Swaps
  • Credit derivatives
  • Option strategies
  • Black-Scholes model
  • Binomial pricing model

Learning

  • 20 one-hour lectures
  • 5 one-hour seminars
  • 125 hours of guided independent study

Assessment

  • Coursework questions (5%)
  • Coursework test (25%)
  • Exam, 2 hours (70%)
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