This unit teaches techniques necessary for running a successful lending book. It outlines the steps which must be taken in performing credit evaluation, and provides the analytical techniques necessary to carry out such evaluation. This unit does not cover the legal aspects of financial institution lending.

This unit provides an introduction to the major classes of derivatives: forwards, futures, swaps and options. These are studied in detail with the objective of elucidating the ways in which these instruments can be used for the purposes of hedging, speculation and arbitrage. In addition to the analysis of derivative usage and market growth, considerable attention is given to the objective of gaining an understanding of the fundamentals of derivative pricing.

This unit covers the tactics of financial institution management – the factors which determine short-term managerial decisions in financial institutions. A major part of the unit is the discussion of asset/liability management.

This unit examines the valuation of assets, firms and securities. The focus is on the attempt by active investors to identify mispriced securities by projecting a firm’s future cash flows based on pro forma financial statements, translating those projections to values and dividing the firm value among the different security holders of the firm. Students develop their understanding of accounting, finance and economic concepts in this applied unit by building models of a firm and conducting analyses of the equity valuation.