Financial Markets, Institutions, and Instruments
Course Number 1433
Associate Professor Daniel Bergstresser
Winter, 20 Sessions
Course is targeted to students who will need to understand and value derivatives in corporate finance applications. This would include students who intend to pursue careers in investment banking, corporate finance, and investment management.
Through case studies, we study in detail how financial engineering is used in firms to reduce their costs of financing, to alter their fundamental risk exposures, and in a handful of cases, to provide them with new ways to compete. The premise behind the FMI course is that financial engineering can be used by corporations to increase shareholder value (or misused to destroy it.) Therefore, the course seeks to help corporate managers understand how to use financial engineering to advance the goals and strategies of their firms. To accomplish this goal, the course (1) documents how financial engineering has been used by firms to accomplish various goals; (2) provides students with frameworks to determine when and how firms can apply financial engineering in managing their businesses; and (3) provides students with basic technical skills in financial engineering.
Course will have 20 sessions and a paper. Course sessions will be a mix of cases and other work to understand and price the different types of derivatives used in corporate finance applications.