25620 Derivative Securities6cp
Requisite(s): 25556 The Financial System
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.
Recommended studies: algebraic manipulations, basic elements of statistics (mean, variance, covariance and correlation), abstract mathematical concepts, basic principles in finance (the time value of money and risk-adjusted discount rates)
Derivative securities play an important role in current financial markets. This subject provides students with an understanding of the following derivatives securities: forwards, futures, swaps and options traded in both domestic and international markets. Students learn the fundamentals of derivatives pricing (i.e. valuation by arbitrage arguments) and their use for hedging and trading purposes. Students develop technical and analytical skills through applied practice-based problems by assessing and managing financial risk using derivatives, and evaluating positions and trading strategies in futures, forwards, swaps and options contracts. The fundamental knowledge and skills developed in this subject are necessary for a career in finance.
Detailed subject description.