In­vest­ments: Fin­an­cial Mar­kets, Op­tions and De­riv­at­ives

About

This course is both theoretical and practical. No background in financial markets or knowledge related to investments is required. We analyze the current situation in the financial markets using both historical and forward-looking perspective.

The course covers different investment assets and investment instruments including debt (bonds), equity and derivatives, and the cross relation between them. Thus, it gives the students a broad view on the macroeconomy and financial markets, markets that have developed and adjusted to the new technology available for trading.
In addition, the course covers recent and previous crisis, the correlation (or not?) of financial markets and real economies, effects on savings, risk taking, etc.
The role of big investors (hedge funds, saving funds and other institutional investors) is examined, and a question mark on them supporting/endangering financial markets is raised.

The first part of the course covers the debt market, including the recent developments in the interest rates and central banks decisions.
In the second part we learn about options (and other derivatives) and emphasize the relationship between risk and return.
The third part combines bonds and options, adds equity (stocks) and shows the link between the three, discussing arbitrage and leverage.
The fourth part uses previous materials to explain recent crisis, the recent inflation, the hedge-fund industry, commodities prices, forex markets, employee options, hedging, etc.

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:

Apply the aspects of fixed income assets on bond's pricing and its risk sensitivity. Analyze and explain the effect of bankruptcy risk on the yield to maturity of the bond.

Implement the use of leverage in common financial problems, and analyze the effects of using leverage on risk and return.

Analyze option pricing (theory and practice) using the same models used in most financial firms.

Describe the process of financial markets movements and the role derivatives play in stability and instability of financial markets.

Identify hidden derivatives in real "simple life" agreements and deals.

Most important: handle portfolio management based on understanding the characteristics of investments

Course leader

Carsten Sørensen - Department of Finance (FI)

Target group

This is a graduate level course. CBS Summer University courses at Copenhagen Business School is open to all and welcomes domestic and international students as well as professionals

Fee info