Content, progress and pedagogy of the module

The module gives the students a thorough understanding of derivatives, their applications, and selected models for the pricing of derivatives such as futures, forwards, swaps, and options.

The purpose of this module is that the students gain knowledge, skills, and competencies at a further educational level such that they can discuss and analyze central concepts, methods, models, tools and problems within the subject area. The students apply relevant software and search digital databases when working with the content of the module. Part of the teaching material is digital.

The lectures contain theoretical discussions as well as discussions of common applications and examples. In the exercise sessions, the students are exposed to practical problems that they solve by applying the theories that have been presented in the lectures.

Learning objectives

Knowledge

The objective is that the student after the module possesses the necessary knowledge on:

• and insight in the theories, concepts, models, and methods within the subject area.
• of how various financial derivatives work, how they are used, how they are priced, and how companies and financial institutions hedge their risks when they trade derivatives instruments.
• explaining and exemplifying central aspects within the theories, models, and methods within the subject area; and in addition, the student should demonstrate an understanding of relevance, reliability and validity about these.

Skills

The objective is that the student after the module possesses the necessary skills in:

• handling how knowledge in the theoretical frame of reference of the subject area makes it possible to price and value standards futures and options contracts and other derivatives.
• analysing and assessing results regarding their validity, relevance, and limitation with the purpose of deducing a basis for a decision and conclusion regarding the particular financial problem based on the conducted analyses and calculations.
• applying and integrating the skills and knowledge in companies, financial institutions or the finance profession in general.

Competences

The objective is that the student after the module possesses the necessary competences in:

• identifying theoretical and practical financial problems of the companies or financial institutions, and choose and put in place relevant solutions such that the ability to analyse, derive, weigh and judge the different alternative actions is clearly demonstrated.
• reflecting upon the theoretical frame of reference and apply this to analyse and solve financial problems.
• calculating the price of standard derivative securities using mathematical models and numerical methods.

Type of instruction

For information see § 17.

Exam

Exams