May 26, 2020
FIN 479 - Derivative Securities and Risk Management (Put on Reserve 9/16/16.)
Survey of characteristics, markets, and pricing of options, futures, and other derivative securities and their use in managing risk for large and small businesses and investors, domestically and internationally. (Put on Reserve 9/16/16. Last taught in 2011. Will go inactive 8/24/19.)
Prerequisites: a grade of C or higher in FIN 370 and admission to a College of Business major AND completion of the College of Business Foundation courses (ACCT 251 and ACCT 252 and BUS 221 and BUS 241 and MATH 153 or MATH 154 or MATH 170 or MATH 172 or MATH 173 and ECON 201) with a minimum C- grade in each course and a minimum collegiate GPA of 2.25.
Upon sucessful completion of this course, the student will be able to:
Learner Outcomes Approval Date:
- Explain the basic processes of hedging and speculation as risk transfer and how options and futures facilitate these processes.
- Analyze the potential results of basic and advanced option combination strategies using the profit diagram framework.
- Describe the basic factors that determine values of put and call options, and demonstrate familiarity with two fundamental valuation frameworks-the binomial and Black-Scholes.
- Describe the basic institutional characteristics of options forward and futures contracts and markets (both exchange-based and over-the-counter) in the U.S. and abroad.
- Describe the relation between forward (or futures) prices and spot prices, and the reasons why forward prices may differ from futures prices.
- Demonstrate examples of various hedging and speculative strategies using equity, index and currency features.
- Demonstrate competence in obtaining and evaluating information from internet web sites that provide information about options, forward, and futures markets.
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