FIN 612 Derivative Markets (3 credits)

Derivatives are financial instruments whose returns are derived from those of other financial instruments. Derivatives serve a valuable purpose in providing a means of managing financial risk. By using derivatives, companies and individuals can transfer for a price, any undesired risk to other parties who have risks that offset the other party’s risk or who want to assume the risk of the other party. Derivatives can be based on real assets, such as agricultural commodities, metals, and sources of energy, or financial assets. This course is designed to have students learn about the characteristics of the institutions and markets where these instruments trade, the manner in which derivative prices are determined, and the strategies for the effective use of the instruments.

Prerequisite: FIN 550.