2012/2013 BAHA_E162 Financial derivatives and their applications
English Title  
Financial derivatives and their applications 
Course information 

Language  English 
Exam ECTS  7.5 ECTS 
Type  Elective 
Level  Bachelor 
Duration  One Quarter 
Course period 
Spring, Third Quarter
wednesday 11.4014.15, week 512. thursday 11.4014.15, week 5,12 Changes may occur. 
Time Table  Please see course schedule at eCampus 
Max. participants  60 
Study board 
Study Board for BSc in Economics and Business Administration

Course coordinator  


Secretary Marianne Andersen ma.fi@cbs.dk  
Main Category of the Course  


Last updated on 25102012 
Learning objectives  
The course will provide students with an understanding of how financial derivative markets function and a basic toolbox for pricing and hedging derivatives. The toolbox will combine finance theory with examples and practical exercises. By the end of the course, the students should have a broad understanding of the derivative contracts discussed in the course. This means that they should be able to:


Prerequisite  
The course requires knowledge of basic financial theory, as acquired for example in a standard corporate finance course. This is a quantitative course and the students should be interested in appluying basic mathematics to real world problems.  
Examination  
4 hours written exam with aid (calculator)  


Examination  
The exam is PCbased with no internet access. It is possible to write in hand. No other aids than English dictionaries and following calculators: HewlettPackard: HP10BII and Texas: Texas BAII Plus. The retake exam will take place using the exact same conditions as for the ordinary exam, unless the number of students for the retake is such that it can be held as an oral exam. The exam would then be a 20 minute oral exam without preparation time. The different exam forms for the retakes will be uploaded to the exam plan on ecampus. 

Course content  
This course deals with both theory and application of derivatives markets and their uses in portfolio allocation and risk management.The students will learn the fundamental concepts of derivatives pricing and hedging and apply them to a variety of debt instruments.The following areas are covered in the course:


Teaching methods  
The course consists of lectures where the basic concepts are introduced and explained and exercise classes where the students have the possibility to gain a deeper understanding of the concepts as well as practical knowledge of the methods presented in the lectures. Exercises and additional materials for discussion for the exercise classes will be made available in advance and the students are expected to actively participate in class. In addition to the exercise classes and lectures, there will be two voluntary problem sets, which the students can hand in in groups of 3 or 4. The problem sets will be corrected and an indicative grade will be given. Each problem set will be accompanied by a special session discussing main problems and various ways of solving them. The problem sets will be indicative of the exam. 

Expected literature  
The following textbook is indicative: Hull, J: Options, Futures, and other Derivatives. 8:th Edition. PrenticeHall. 
Last updated on 25102012