Financial Derivatives

Module code: EC7076

Module co-ordinator: TBC

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 tutorials

Assessment

  • Exam, 2 hours (100%)