Course Description
This course presents and analyzes derivatives, such as forwards, futures, and options. These instruments have become extremely popular investment tools over the past several decades, as they allow one to tailor the amount and kind of risk one takes, be it risk associated with changes in interest rates, exchange rates, stock prices, commodity prices, inflation, weather, etc. They are used by institutions as well as investors, sometimes to hedge (reduce) unwanted risks, sometimes to take on additional risk motivated by views regarding future market movements.
The course defines the main kind of derivatives, shows how they are used to achieve various hedging and speculating objectives, introduces a framework for pricing derivatives, and studies several applications of derivative-pricing techniques outside derivative markets. By its very nature a course like this involves some advanced mathematics and statistics. However, in this course the math will be kept to the minimum that is required.
- Lecturer: Msongelwa Ndlovu