78159 - Financial Products and Markets

Academic Year 2018/2019

  • Teaching Mode: Traditional lectures
  • Campus: Bologna
  • Corso: Second cycle degree programme (LM) in Quantitative Finance (cod. 8854)

    Also valid for Second cycle degree programme (LM) in Economics (cod. 8408)

Learning outcomes

At the end of the course the student has a sound knowledge of the financial products traded in the market, the differences among them, and the reasons why they were introduced in the market. The products range from standard bonds and stocks, to derivatives and structured finance products. The student has knowledge of the main agents trading in the market, as fund raisers or investors, as well as financial intermediaries.

Course contents

Financial Products and Markets (78159) builds on knowledge acquired in the previous module (75363 – Corporate Finance) and provides students with an overview of financial derivatives, emphasizing the role of such instruments in corporate financing and risk management. The module discusses the economics of corporate hedging and provides a critical appreciation of the underlying features and functions of a range of financial derivatives. The focus is on hedging and valuation, and the presentation is aimed at the practical application of financial derivatives to hedge corporate exposures. The last part of the course will deal with some open issues in corporate financing and risk management.

Readings/Bibliography

The main textbook of the course is the following.

  • Hull, J., 2018, Options, Futures, and Other Derivatives, 10th Ed., Pearson-Prentice Hall.

Additional readings may be assigned by the instructor as the course progresses. Please note that slides used in class (available in the “teaching material” section, accessible from the course unit webpage) are also required.

Teaching methods

Traditional lectures and classes.

Assessment methods

Final class test. – A 90 minutes final class test will take place after the class ending, within the official exam sessions. It will include 8 multiple choice questions (8 points), 1 short answer question (6 points) and 2 practice questions (16 points, i.e. 8 points each). The class test will be in the form of a closed-book exam, and no textbooks or notes will be allowed.

Assignment. – Attending students will be offered the option to solve an assignment and to deliver the solution to the lecturer (by email) no later than the date of the final class test (delivery date). Students will have to solve the assignment as a group (2 to 3 students per group), and the solution will consist in one PDF file. The assignment will be graded and assigned a payoff of 0 to 6 points, to be added to the final grade of the module. The option “cost” is 3 points, subtracted to the final grade of the module as soon as the solution to the assignment is delivered. Please note that there will be only one grade per group, no matter how the work load is distributed among the group members. Students will be required to pick their own group members and to let the instructor know (a) names, and (b) email addresses of all of them by the third scheduled meeting.

Teaching tools

Slides and example exercises.

Office hours

See the website of Massimiliano Barbi