CORPFIN 7023 - Financial Modelling Techniques (M)

This course develops discrete binomial models for valuing financial derivative products with a variety of underlying assets, including stock and foreign currency. The Ho-Lee model, which predicts future interest rates, is introduced and incorporated into the derivative pricing model. Methods are discussed for minimising financial risk when trading derivative products, such as hedging and the margin of a futures contract. When applying the modelling, solution methods rely on efficient and practical spreadsheet skills. This course emphasises practical modelling and real world applications by developing and solving models which are commonly applied in the financial industry.