Derivatives
Module code: AF2137
Derivatives provide important tools for investors and portfolio managers in risk management. In this module, you will analyse the features of important financial derivatives, futures and forwards, and discuss how these derivatives are priced and used. You will identify the risks involved in the financial markets and construct derivatives to hedge the financial risks. You will also gain an understanding of other common types of derivatives, including swaps and options. Importantly, you will be able to discuss the role of financial derivatives in the recent financial crisis.
Topics covered:
- Introduction to futures and forwards
- Types of traders and hedging strategies using futures and forwards
- Optimal hedge ratio
- Stock Index Futures, forwards and futures on currencies, interest rate futures
- Future and forwards pricing
- Introduction to swaps
- Introduction to options