Overview of futures markets and options markets. Analysis of pricing of futures contracts and options; comparison of futures, forward, and options contracts; risk management with hedging; alternative investment strategies; and review of empirical evidence. Prerequisite: MBA Core Finance.
This course analyzes the pricing of financial futures contracts and options and reviews available empirical evidence concerning these markets. Financial risk management by hedging is given particular attention. Futures, forward and options contracts are compared, and alternative investment strategies are discussed.
Student learning goals
General method of instruction
Lectures. A REQUIRED package of "Finance 561 - Notes" will be available at the beginning of the quarter in the Copy Center in Balmer Hall.
1. Read the asssigned reading BEFORE and again, AFTER EACH class! 2. Do ALL the assignments.
There is NO required textbook. I RECOMMEND that buy one or more of several OPTIONAL textbooks. Their names will be provided on the first day of class.
Class assignments and grading
Several homework assignments of problem sets. Homework assignments can be submitted on an individual basis or in groups of 2-5 students.
Students will be graded on the basis of homework assignments with a total weight of 20%; and a midterm and a final with a weight of 40% EACH. Students can earn a BONUS of up to 10% by ACTIVE CONRTIBUTING class participation.