Advanced Laboratory in Financial Risk Management

There are 3 primary objectives for this course:
(1) help students understand the basics of financial derivatives like options, forwards, futures, and swap contracts.
(2) how to use the Binomial Model as the basic framework to obtain arbitrage-free prices of Call and Put options, Forwards and Futures contracts. The emphasis is on intuitive understanding of the pricing models rather than mathematical derivations.
And
(3) understand various investment strategies that combine Call and Put options with the underlying stock, or Exchange Traded Funds (ETFs).

At the end of the Laboratorio, students will 1) Know how to compute gains/losses from going long or short futures contracts; 2) how to create synthetic securities using stocks and bonds; 3) understand how to trade (speculate with) Futures contracts, and Call and Put options in bullish and bearish markets.