Derivatives

Description

The phenomenal growth in the global markets for exchange-tradedrnOptions and Futures contracts on financial assets (foreignrnexchange, fixed income and equity securities, and stock indices)rnand on commodities has been accompanied by the growth in Overthe-rnCounter markets for swaps, related options, and otherrnstructured products. These derivative securities are used to meet arnvariety of objectives. For example, the markets in options on stockrnindices and in futures contracts on Treasury securities allowrnmanagers to control the risk of their portfolios and alter therndistribution of the returns on their portfolios. In addition, optionsrnand futures contracts on interest rates, currencies and commoditiesrnpermit corporate treasurers to manage risk. These markets alsornpermit individuals as well as hedge funds to speculate on pricernmovements and relative price relationships among assets andrncommodities. A solid grasp of options and futures helps students tornunderstand these contracts and their valuation with relative ease.rnThrough learning these valuation techniques, students will uncoverrnmany practical aspects of the use of options and futures.rnThe widespread use of financial derivatives in financial marketsrncreates a substantial need to explore the use of basic types ofrnderivative instruments and hybrids in the context of financial riskrnmanagement by firms and financial institutions and to developrncompetencies in pricing, hedging and trading strategies.

Program

Fin. Major

Objectives

• 1- To provide a comprehensive analysis on the properties of options and futures. 2- To offer a theoretical framework within which all derivatives can be analyzed and valued. 3- To provide a solid foundation for advanced courses of the program such as fixed incomernanalysis and financial engineering. 4- To develop competencies in pricing, hedging and trading strategies.