Derivates and Alternative Investments

The course gives a thorough introduction to key theories about derivatives and alternative investments. It also provides knowledge about the framework for elementary derivatives, derivative markets, and the use of options in risk management, and the role of other, alternative investments, on the overall return and risk of a portfolio. A thorough review of how to find the price of simple derivatives is central to the course, as well as how the statistical properties of returns affect the prices of derivatives.

Knowledge

The student ...

* Can demonstrate broad knowledge of key topics, issues, tools and methods within derivatives and alternative investments, including what a contingent claim is

* Can use, discuss and apply different theories about derivatives and alternative investments in tasks and case studies, such as how the price of a simple option is calculated

* Can update their knowledge in the use of derivatives for new financial products

* Has knowledge of the history of the subject area and especially the groundbreaking work of Black and Scholes

Skills

The student can...

* Apply knowledge of the valuation and risk of derivatives and alternative investments, as well as discussing potential sources for changes in value

* Reflect on their own understanding of the benefits, and controversies, related to derivatives markets

* Find, evaluate and refer to information related to pricing and analysis of different types of derivatives

* Use relevant tools, such as standard software or calculators, for simple calculations related to elementary derivatives and alternative investment assessments

General competence

The student ...

* Has insight into issues related to derivatives and alternative investments as well as controversies around such markets

* Can plan and carry out tasks that include empirical observations and their use in calculating the prices of derivatives

* Can communicate key theories, such as the Black and Scholes option pricing formula and its underlying assumptions, in an understandable manner both written and oral

* Can exchange views on the role of derivatives markets to people with or without a background in finance

* Has knowledge about recent developments within the derivatives market and alternative investments

No costs except semester fee and course literature.

Face-to-face lectures

Pen, pencil, ruler, approved calculator and bilingual Dictionary.

Calculator: Texas Instruments BA II Plus