Degree Course: ECONOMIA AZIENDALE (L-18) A.Y. 2011/2012 

The course offers an introductory and analytical treatment of the fundamentals of valuation in the context of bond products and bond derivatives. Starting from the skills of risk return, the course analyzes the main instruments as well as the techniques used in the interest rate segment, with reference to both basic instruments and linear derivatives. The different topics are treated both from a theoretical point of view and from an applied point of view, with the use of Excel and other software.

Learning objectives
Active course attendance and study allow the student to:
- know the institutional characteristics of the domestic and international bond market (knowledge and understanding);
- be able to understand the basic concepts of yield and risk in the context of interest rate models (knowledge and understanding);
- be able to calculate the different measures of risk and return in an interest rate book context (applying knowledge and understanding);
- be able to estimate the price of linear interest rate derivatives (applying knowledge and understanding);
- know the most up-to-date topics on innovative products from academic and professional publications and sites (learning skills).

Students are provided with exercises and are assigned a project work that allows them to develop the ability to search for data and information to be processed, to develop advanced quantitative modeling and to arrive at conclusions regarding the evaluation of the risk return of financial products (making judgments); to work in a team and to organize and manage a project (learning skills) and communication with the teacher; the ability to communicate results, revealing critical points and analyzing the output using independent judgment (communication skills), managing Excel and any programming languages (communication skills).

Active course attendance and study allow the student to
- know the institutional characteristics of the domestic and international stock market (knowledge and understanding);
- be able to understand the basic concepts of return and risk in the context of mean-variance models (knowledge and understanding);
- be able to calculate the different measures of risk and return in a portfolio context (applying knowledge and understanding);
- be able to understand the purpose and functioning of Markowitz models and CAPM (knowledge and understanding);
- be able to calculate and interpret various performance measures (applying knowledge and understanding);
- be able to understand the definition and use of call and put options and their combinations (applying knowledge and understanding);
- be able to estimate the price of plain vanilla options using the Black Scholes model, the binomial model, and Monte Carlo simulation (applying knowledge and understanding);
- be able to estimate the greeks of options, and to use them for hedging purposes (applying knowledge and understanding); - be able to describe the different approaches to hedging of options (applying knowledge and understanding);
- be able to describe the different approaches used professionally for the management of an equity portfolio (knowledge and understanding);
- know the most up-to-date topics on innovative products from academic and professional publications and sites (learning skills).
Students are provided with exercises and are assigned a project work that allows them to develop the ability to search for data and information to be processed, to elaborate advanced quantitative models and to arrive at conclusions regarding the risk return assessment of financial products (making judgments); to work in a team and to organize and manage a project (learning skills) and communication with the teacher; the ability to communicate results, revealing critical points and analyzing outputs using autonomy of judgment (communication skills), managing Excel and any programming languages (communication skills).