This course introduces students to the financial instruments used in modern financial practice, particularly forward contracts and options. The emphasis is on developing the concept of risk-neutrality and the financial and mathematical theory underlying the behaviour of these financial instruments and preparing students with knowledge to solve related problems. Students should have a basic understanding of probability concepts to be properly prepared for this course.

Continuous Assessment: 30%

Examination: 70%

Examination Duration: 3 hours

For a student to pass the course, at least 30% of the maximum mark for the examination must be obtained.