ØABED3800 Derivatives Course description

The market for financial derivatives is one of the biggest in the world. The most important derivative securities are forwards, futures, options, and swaps. Derivatives are central instruments for companies when they deal with risk. This subject focuses on how companies and other institutions can reduce risk by using derivatives contracts. The course is taught in English.

ØABED3500 Investments

On successful completion of this subject the student:

Knowledge

Have a wide knowledge of markets, trading and valuation of forwards, futures, options and swap contracts.

Are aware of the theories behind valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options.

Have knowledge about how valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options can be used for analyzing new problems.

Skills

Can use existing theories and methods in derivatives pricing.

Can reflect over own independent work on practical problems in valuing and trading derivatives contracts. 

Can use valuation models such as Cost of carry for futures and Binominal and Black-Scholes for options independently.

General competence

Are aware of the development and innovation of the use of derivatives contracts.

Can exchange own views on the use of derivatives contracts.

The course is taught in lectures.

The following three individual coursework requirements must have been approved in order for the student to take the exam:

Assignment 1  Futures

Assignment 2  Swaps

Assignment 3  Options

All required coursework must be completed and approved by the given deadline in order for the student to take the exam. If one or more coursework requirements have not been approved, the student will be given the opportunity to submit an improved version (once) by the given deadline.

There is one final 4-hour school exam at the end of the semester.

One basic non-programmable financial calculator (see own regulation).

One Norwegian-English dictionary (see own regulation).

Grades on a scale from A-F

An external sensor will together with the internal sensor grade the exam.