Department of Business Administration
Dean:Dr. Friðrik Már Baldursson
MSc in Corporate Finance
Learning OutcomesView
Education cycle2
Degree titleMaster in Corporate Finance
Mandatory course on majorTeaching language
Optional course on majorPrerequisites for course
Vorönn/Spring 2020
More infoIntegrated Project I; Conceive and DesignElectiveT-800-INT1ECTS 8
More infoGlobal Issues in Travel and TourismElectiveV-711-GLTTECTS 7,5
More infoConsumer BehaviorElectiveV-712-COBEECTS 3,75
More infoInnovation ManagementElectiveV-713-INNMECTS 7,5
More infoEntrepreneurship and Innovation in ContextElectiveV-715-ENICECTS 3,75
More infoBusiness Process ManagementElectiveV-716-BPMAECTS 7,5
More infoFixed Income AnalysisElectiveV-716-FINCECTS 3,75
More infoManagement controlElectiveV-717-CPMAECTS 7,5
More infoImplementation of information systemsElectiveV-717-IMISECTS 3,75
More infoEntrepreneurial FinanceCoreV-733-ENTRECTS 7,5
More infoInternational and labour economicsElectiveV-733-ILECECTS 7,5
More infoBranding and Strategic MarketingElectiveV-741-BRANECTS 7,5
More infoStrategic HRM and MetricsElectiveV-745-STRAECTS 7,5
More infoBusiness Research MethodologyElectiveV-746-REMEECTS 7,5
More infoInternshipElectiveV-748-INTEECTS 7,5
More infoCases in corporate financeCoreV-763-COR2ECTS 7,5
More infoFinancial Reporting and Accounting Standards IIElectiveV-765-FIR2ECTS 7,5
More infoApplied DerivativesCoreV-766-APDEECTS 7,5
1. yearPrint
SemesterSpring 2020
Level of course4. Second cycle, introductory
Type of courseElective
PrerequisitesV-755-CORP, Corporate Finance
ScheduleNo schedule found.
K. Ravindran
Derivatives are widely known financial instruments that can be used very effectively to hedge against or speculate on any financial markets risks/behaviour. Derivatives also have had the bad rap as the weapons of the mass destruction (courtesy of Warren Buffet). This course will cover the practical applications of basic building blocks of derivatives (i.e. forwards, futures, swaps and options) and then use the options as the base to construct other more useful, effective and powerful risk-management and speculation options. In addition, the course will discuss the valuation (or quantification of the risks underlying) these options using spreadsheets (including the construction of zero rate curves and volatility term structures). Time permitting, the course will also discuss a few case studies on how these are applied in practice.
Learning outcome - Objectives
The student should understand:
•How to build a zero curve using bonds and money market instruments?
•The concept of the basic building blocks of derivatives (forwards, futures, swaps and options) from both a practical and theoretical perspective.
•Risks arising from the transaction of derivative instruments in the equity, currency, interest rate markets.
•How to go about quantifying the risks underlying many standard derivative contracts using Excel Spreadsheet.
•How to go about using derivatives in practice to hedge and/or speculate.
The student should be able to
•Build an approximate zero curve that can used as inputs to value the derivatives and embedded derivatives
•Qualitatively understand the risk exposures arising from financial transactions
•Build a simple pricing tool in Excel so as to be able to approximately quantify the risks that has been qualitatively understood

The student should be able to:
•Value most derivatives contracts in the equity and currency markets.
•Value simple derivatives contracts in the interest rate markets.
•Quantify financial risks any corporation is exposed to using a what-if-scenario analysis
•Create a customized derivatives hedge to mitigate financial risks
•Export these concepts understand/appreciate and solve problems in other markets not discussed in class (e.g. Oil, electricity, weather etc.)
Course assessment

Reading material
No reading material found.
Teaching and learning activities
Teaching will be done using a combination of approaches ranging from lectures to case studies to discussions to class exercises and group presentations. The teaching will rely on the students’ active participation and good preparation. The teaching methods reflect the stated learning outcomes of the course.
Language of instructionEnglish
More infoConsolidated Financial StatementsElectiveV-767-SAREECTS 7,5
More infoBusiness research methodology in accounting and financeCoreV-782-BRMAECTS 7,5
More infoBusiness Intelligence and AnalyticsElectiveV-784-REK5ECTS 7,5
More infoCorporate LawElectiveV-802-BULAECTS 7,5
More infoTourism MarketingElectiveV-840-TOMAECTS 7,5
More infoTraining and DevelopmentElectiveV-840-TRDEECTS 3,75
More infoAccounting for derivatives and other financial instrumentsElectiveV-871-AFLEECTS 7,5
More infoMSc ThesisElectiveV-888-THHLECTS 7,5
More infoResearch ProposalCoreV-898-REPRECTS 0
More infoMSc ThesisCoreV-898-THESECTS 30
More infoExchange StudiesElectiveX-699-EXCHECTS 30
Sumarönn/Summer 2020
More infoTrends in Hospitality ManagementElectiveV-721-TRHMECTS 7,5
More infoAccounting Fraud and ForensicsElectiveV-722-AFORECTS 7,5
More infoSustainable Tourism Development and InnovationElectiveV-725-SUTOECTS 7,5
More infoNegotiations and SalesElectiveV-744-NEGOECTS 7,5
More infoInternshipElectiveV-748-INTEECTS 7,5
More infoThe Finance underlying Blockchain and CryptocurrencyElectiveV-749-FIBCECTS 7,5
More infoCross-cultural CommunicationElectiveV-756-CRCOECTS 7,5
More infoManagement AccountingElectiveV-793-MAACECTS 7,5
More infoInformation Technology in AccountingElectiveV-804-INTAECTS 7,5
More infoSustainable LeadershipElectiveV-836-SLEAECTS 3,75
More infoVenture CapitalCoreV-875-VENTECTS 7,5
More infoMSc ThesisElectiveV-888-THHLECTS 7,5
More infoMSc ThesisCoreV-898-THESECTS 30