- Financial assets and financial markets
- Overview of risks and risk management
- Overview of market participants
- Depository institutions
- Insurance companies and defined benefit pension plans
- Managers of collective investment vehicles
- Investment banking firms
Basics of Cash and Derivative Markets
- Primary and secondary markets
- Introduction to linear payoff derivatives: futures, forwards, and swaps
- Introduction to nonlinear payoff derivatives: options, credit default swaps, caps, and floors
- Securitisation and its role in financial markets
Risk and Return Theories
- Return distributions and risk measures
- Portfolio selection theory
- Asset pricing theories
Interest Rate Determination and Debt Pricing
- The theory and structure of interest rates
- Valuation of debt contracts and their price volatility characteristics
- The term structure of interest rates
- The structure of the common stock market
- Common stock strategies and trading arrangements
Debt Markets: Part 1
- The money market for private debt instruments
- Treasury and agency securities markets
- Municipal securities markets
- Corporate senior instruments markets
Debt Markets: Part 2
- International bond markets
- The residential mortgage market
- The market for U.S. agency residential mortgage-backed securities
- The market for credit-sensitive securitised products
- The market for equity derivatives
- The market for interest rate risk transfer vehicles: exchange-traded products
- The market for interest rate risk transfer vehicles: OTC instruments
- The market for credit risk transfer vehicles: credit derivatives and collateralised debt obligations
- The market for foreign exchange and risk control instruments
- Financial regulators
- Individual and institutional investors and borrowers.
- Those who wish to understand financial product innovation with an emphasis on risk management and regulatory reform.
- Those who wish to understand the wide range of instruments for financing, investing, and controlling risk in today’s financial markets.
Upon completion of this course, you will be able to understand:
- An introduction to financial markets, the attributes of financial assets, and the link between financial markets and the real economy.
- An overview of risk that covers the difference between risk and uncertainty, the key elements of financial risk management, the identification and quantification of financial risks, the various types of investment risk faced by investors, and the various types of funding risk faced by entities seeking to raise capital.
- An overview of market participants, and the special role of those classified as financial intermediaries.
- The roles of government in the regulation of financial markets, credit rating agencies, and international entities such as the Bank for International Settlements and the Financial Stability Board.
- Depository institutions.
- Insurance companies and defined benefit pension plans.
- Collective investment vehicles, or investment products managed by asset management firms.
- The wide range of activities performed by investment banking firms.
- The fundamentals of primary and secondary markets.
- Different types of financial derivatives, the elements of their pricing, and how they are used to control various types of financial risks.
- The role of securitisation in financial markets, and its use by corporations and governments as a risk management tool.
- The different types of distributions that financial asset returns can be assumed to follow, different measures of dependence between asset returns, attributes of portfolio risk measures, and alternative ratios of reward to risk.
- Portfolio theory and asset pricing, and their limitations.
- The classical theory of interest rates, and how all other interest rates differ from it.
- How debt obligations should be priced in the market, and how to determine the calculation of a bond’s yield.
- The relationship between the yield on a bond and its maturity, referred to as the term structure of interest rates.
- The structure of the common stock market, the regulators of equity markets, the venues available to investors for executing trades, and how order are executed.
- The strategies employed by investors in the common stock market, the notion of pricing efficiency and its impact on the type of strategy that should be selected.
- The various types of trading strategies, and the issues associated with high-frequency trading.
- A wide range of debt products – money market instruments, treasury and agency securities, municipal securities, corporate senior obligations, international bonds, residential mortgage loans, agency residential mortgage-backed securities, and credit-sensitive securitised products.
- Each derivative contract, how the basic pricing models have to be modified because of the nuances of the contract features, and how the derivative instrument can be used to control risk.
£4690 + VAT