Master's in Science Finance: Navigating DerivativesRisk Management in Financial Markets

Master's in Science in Finance MSF Program - Derivatives and Risk Management Course

In the rapidly evolving world of finance, the market value of derivative securities far outpaces that of stocks. This underscores the critical importance for all financial professionals to gn deep understanding about how these markets function, how derivatives can be leveraged, and their valuation principles. The MSF program's 'Derivatives and Risk Management' course delves into this topic extensively.

Course Objectives:

1. Comprehing Financial Risks: Grasp the variety of risks corporations face, linking spot rates to forward rates, interest rates with inflation.

2. Principles for Managing Risk: Learn how risk management techniques can be utilized to generate value in business environments.

3. Instrument Characteristics and Applications: Understand different derivatives' features and their applications for hedging, speculation, or arbitrage.

4. Derivatives Market Mechanics: Discover the organization of markets, trading mechanisms of instruments, and setting of margin requirements, among others.

5. Estimation of Derivative Values: Gn insights into methods to estimate derivative values effectively.

6. Trading Strategies Involving Options: Explore how to implement strategies that involve a combination of options.

7. Real Option Valuation: Study the approach used for valuing investment opportunities considering real-world dynamics and uncertnties.

8. Historical Misuses of Derivatives: Review examples where derivatives were misused in financial history, learning from past mistakes.

9. Value at Risk VaR: Understand the concept and application of VaR to measure potential losses under different market scenarios.

Educational Objectives:

Upon successful completion of this course, you will be equipped to:

• Understand the various risks corporations encounter in a multinational setting and correlate their impact on spot rates, forward rates, interest rates, and inflation.

• Apply risk management principles effectively for value creation within business environments.

• Recognize, evaluate, and employ derivatives such as forwards, futures, options, and swaps as hedging, speculative tools or opportunities for arbitrage.

• Grasp the operational structure of derivative markets including organization, trading dynamics, margin requirements setting protocols, etc., with practical examples to illustrate how these mechanisms work in real-world scenarios.

• Calculate and interpret the value of various derivatives using applicable valuation methods and.

• Develop strategies involving multiple options effectively to maximize returns while mitigating risks.

• Analyze investment opportunities using the real option framework considering uncertnties inherent in market dynamics.

• Identify historical cases where misuse of derivatives led to significant financial losses, gning insights into prudent risk management practices.

• Understand and apply Value at Risk VaR methodologies for assessing potential losses under various market conditions.

Please visit our program page or contact us directly at 866 531-4825 for more information about the MSF degree curriculum.

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