2014/2015 BABHAAV4491U Financial derivatives and their applications
English Title  
Financial derivatives and their applications 
Course information 

Language  English 
Course ECTS  7.5 ECTS 
Type  Elective 
Level  Bachelor 
Duration  One Quarter 
Course period  Spring, Third Quarter 
Timetable  Course schedule will be posted at calendar.cbs.dk 
Max. participants  60 
Study board 
Study Board for BSc in Economics and Business
Administration

Course coordinator  


Secretary Louise Bruun Christensen  lbc.fi@cbs.dk  
Main academic disciplines  


Last updated on 12082014 
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:


Course prerequisites  
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 applying basic mathematics to real world problems.  
Examination  


Course content and structure  
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 financial 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 and may be
expanded with academic articles and cases:
Hull, J: Options, Futures, and other Derivatives. 8:th Edition. PrenticeHall. 
Last updated on
12082014