Advanced Financial Economics: Financial and Real Options
This course is devoted to valuation of financial options. The objective is to provide students with a thorough understanding of the arbitrage-free pricing theory for non-linear derivatives and to equip them with fundamental mathematical and numerical tools. We will also discuss practical implementation of derivative pricing models and the use of derivatives in risk management and financial engineering. In addition, we will consider applications of option pricing methods to valuation of stocks, bonds and various investment projects (real options).