MFIN 6667

This course is intended to help students understand derivatives, with emphasis on options and futures. It provides a detailed introduction to the markets, characteristics, applications, and valuations of various futures and options. Topics covered include commodity futures, stock market index futures, interest rate futures, foreign currency futures, stock options, stock market index options, interest rate option, currency options, options on futures, and some exotic options. The binomial option pricing model and Black-Scholes option pricing model are covered, including the stochastic processes underlying the Black-Scholes model and derivation of the model. The course will be delivered in forms of lectures and lab work. While the lectures will introduce the theories, models, and principles, the lab work will expose students to real derivative markets, and help students use financial market databases and option pricing and analysis software.