TTA-45036 Introduction to Financial Engineering and Derivatives Markets, 3 cr

Person responsible

Juho Kanniainen


Implementation Period Person responsible Requirements
TTA-45036 2018-01 3 Margarita Baltakiene
Juho Kanniainen

Learning Outcomes

Understanding of the derivatives markets and the principles of pricing and hedging of options and other derivatives is essential for people working for a) corporations on the use of derivatives for risk management and b) banks and other financial institutions for trading and risk management. After studying this course, the student - Understands the function and characteristics of derivative markets - Understands the specifications of the most common financial derivatives - Understands the no-arbitrage principle in option pricing - Can apply discrete-time models to price vanilla options


Content Core content Complementary knowledge Specialist knowledge
1. Options and other derivatives: - Derivatives markets - Derivatives contracts      
2. Understanding the no-arbibtrage principle in option pricing under Binomial option pricing model.      
3. Practicalities: - Volatility surface; - Greeks;      

Instructions for students on how to achieve the learning outcomes

Exam 100%

Assessment scale:

Numerical evaluation scale (0-5)

Partial passing:

Completion parts must belong to the same implementation

Study material

Type Name Author ISBN URL Additional information Examination material
Book   Options, Futures, and Other Derivatives   John Hull   ISBN: 978-0-13-345631-8       No   


Course Mandatory/Advisable Description
MAT-02500 Todennäköisyyslaskenta Advisable    
MAT-02550 Tilastomatematiikka Advisable    
MAT-63506 Scientific Computing Advisable    
TTA-45010 Yritysrahoitus ja rahoitusmarkkinat Advisable    

Additional information about prerequisites
Courses on probability, statistics, and computing (Matlab) and some prerequisites on finance highly recommended.

Correspondence of content

There is no equivalence with any other courses

Updated by: Baggström Minna, 09.03.2018