FNCE 4382

Survey of Financial and Commodity Derivatives

This course introduces forward contracts, used in price risk management for millennia. We cover the properties of forward/futures contracts, structure of the markets and strategic implications for speculation and hedging. We price forwards from spot price, and introduce convenience yield. Options used for insurance purpose (think of your car insurance as a put option) is a more expensive way to manage risk; we cover option strategies and basic pricing. The course concludes with swaps, credit derivatives and structured products. Asset classes covered are equity, fixed income, currency, agriculture, energy (oil/gas and electricity) and metal/mining. Restriction: Restricted to undergraduate Business majors at a junior standing or higher.

Units: 3.0

Hours: 3 to 3