Risk Transfer to Financial Markets

The primary emphasis of this course is on the structure, pricing, hedging and strategies of futures and options contracts and their applications in a risk management context. The economic role of options and futures markets is examined. Specific topics include: determinants of forward and futures prices, option valuation using binominal trees and Monte Carlo simulation, implied binominal trees, relation between puts and calls, uses of options in investment strategies, hedging techniques, exotic options, applications to corporate securities and other financial instruments.