Skip to main content
Skip header

Basics of Derivatives and Alternative Investments

Type of study Bachelor
Language of instruction English
Code 154-0575/01
Abbreviation BDAI
Course title Basics of Derivatives and Alternative Investments
Credits 6
Coordinating department Department of Finance
Course coordinator doc. Ing. Petr Seďa, Ph.D.

Subject syllabus

1. Overview of derivative markets and instruments
• Structure of derivative markets (exchange-traded, OTC markets),
• definition and uses of derivatives, types of positions,
• classification of derivative instruments (forward commitments, contingent claims),
• derivatives underlyings (equities, fixed-income instruments, currencies, etc.).

2. Forward commitments
• Principles and essentials of forward commitments,
• forward contracts (basic elements, payoff, settlement),
• futures (standardization, clearing and settlement process),
• swaps (concept, essentials of interest-rate swaps).

3. Contingent claims
• Option contracts (definition, types of options),
• basic parameters of options (exercise price, option premium),
• profits and losses graphs (risk and payoff of simple option positions),
• calculation of profit and losses of simple option positions (ITM, OTM, ATM).

4.Introduction to alternative investments
• Definition and purpose of alternative investments,
• classification (by exclusion and inclusion),
• differences between alternative and traditional assets,
• methods of investing in alternative assets (direct, fund investing),

5. Real assets investment
• Natural resources and commodities (overview and characteristics),
• real estate (forms of real estate ownership, investment categories)
• infrastructure and other real assets,
• advantages and disadvantages of investment approaches.

6. Hedge funds and private equity
• Characteristics and main features of hedge funds,
• overview and types of private equity,
• role of venture capital (steps of stage financing),
• performance and risks of private equity investments.

Literature

CFA Institute. Derivatives (CFA Institute Investment Series). Hoboken: Wiley, 2021. ISBN 978-1119850588 .
CHAMBERS, D. R. et al. Alternative Investments. CAIA Level I. 4th ed. Hoboken: Wiley, 2020. ISBN 978-1-119-60415-0 .
HULL, John. Options, futures, and other derivatives. 11th ed. Upper Saddle River: Pearson, 2021. ISBN 978-0-13-500994-9.

Advised literature

BODIE, Zvi, Alex KANE and Alan J. MARCUS. Investments. 12th ed. New York: McGraw Hill, 2021. ISBN 978-1-260-57115-8 .
CHAMBERS, Donald R., KAZEMI, Hossein B., Keith H. BLACK and CAIA Association. Alternative Investments. An Allocator’s Approach. 4th ed. Hoboken: Wiley, 2021. ISBN 978-1119651680 .
LAOPODIS, Nikiforos. Understanding investments: theories and strategies. 2nd ed. London: Routledge, Taylor & Francis Group, 2021. ISBN 978-1000074741 .