Derivatives and specialized products is a course which will examine topics dealing with derivative securities. Derivative securities are often utilized in the management of interest rate, exchange rate, commodity and equity price risks. Derivative securities also provide a vehicle for investors to speculate. The types of derivative securities, their use in modern finance, and methods for pricing them will be the subject matter for this course.
- Discussion of risk
- Mechanics and pricing of forwards and futures
- Interest rate futures
- Options markets
- Properties of stock options
- Trading strategies involving options
- Option pricing: the binomial model
- Option pricing: the Black-Scholes model
- Options on stock indices, currencies, and futures
Methods of Instruction
Material will be presented within a lecture format.
Means of Assessment
Minimum of 3 evaluations, none of which will exceed 40%, for a total of 100%.
At the end of the course, the successful student should be able to:
- analyze and understand the meaning of risk;
- utilize derivative securities for the purpose of managing risk;
- determine the value of different derivative securities;
- analyze the mechanics of futures and options trading.
Course Guidelines for previous years are viewable by selecting the version desired. If you took this course and do not see a listing for the starting semester/year of the course, consider the previous version as the applicable version.
Below shows how this course and its credits transfer within the BC transfer system.
A course is considered university-transferable (UT) if it transfers to at least one of the five research universities in British Columbia: University of British Columbia; University of British Columbia-Okanagan; Simon Fraser University; University of Victoria; and the University of Northern British Columbia.
For more information on transfer visit the BC Transfer Guide and BCCAT websites.
If your course prerequisites indicate that you need an assessment, please see our Assessment page for more information.