Finance 4366 (Options, Futures, and Other Derivatives) will meet synchronously tomorrow via Zoom for our regularly scheduled 11-12:15 class session. We’ll devote our attention to a (very) brief review of my recorded lecture about the replicating portfolio approach for pricing forward/futures contracts and devote most of our time to a discussion of the replicating portfolio approach for pricing call and put options.
If you haven’t already watched my recorded lecture, be sure to do so prior to tomorrow’s class; that lecture introduces the replicating portfolio approach to pricing forwards and futures, based on the lecture note at http://fin4366.garven.com/spring2021/lecture6.pdf. Tomorrow, we will focus attention on the “Pricing Options” lecture note (at http://fin4366.garven.com/spring2021/lecture6a.pdf).
At any point in time this semester, you can make sure that you are on track with Finance 4366 assignments by monitoring due dates on Canvas and on the course website. Links for future class meetings, quizzes, problem sets, and exams appear on the Canvas “To Do” list. Links for readings (along with their due dates) appear on http://fin4366.garven.com/readings/, and links for problem sets (along with their due dates) appear on http://fin4366.garven.com/problem-sets/. In the case of assigned readings, students are required to complete a short (10-minute) readings quiz prior to the start of class for each reading assignment due date; the window for completing this task begins at 10:30 a.m. CT the day before the reading assignment is due.
There is a section in the assigned “Optimization” reading due Thursday, January 21 on pp. 74-76 entitled “Lagrangian Multipliers” which (as noted in footnote 9 of that reading) may be skipped without loss of continuity. The primary purpose of this chapter is to re-acquaint students with basic calculus and how to use calculus to solve so-called optimization problems. Since the course only requires solving unconstrained optimization problems, there’s no need for Lagrangian multipliers.
Besides reading the articles entitled “Optimization” and “How long does it take to double (triple/quadruple/n-tuple) your money?” in preparation for this coming Thursday’s meeting of Finance 4366, make sure you have completed the student information survey, subscribed to the Wall Street Journal, and subscribed to the course blog (if you haven’t already done so).
A subscription to the Wall Street Journal is required for Finance 4366. For online access only, sign up for a “Student Digital Pack” at https://education.wsj.com/search-students. A Student & Digital Pack option (which provides daily home delivery in addition to online access) is available at https://r.wsj.com/PROFxypa.
Throughout the semester, I will often reference specific WSJ articles in class and on the course blog. Finance 4366 topics (as well as topics in many of your other business school courses) come to life in the world outside the Baylor bubble when you make a habit of reading the WSJ on a regular basis. Furthermore, if you expect to interview for jobs or internships anytime soon, reading the WSJ will give you a leg up on the competition, since you will be better informed and have more compelling ideas and insights to share with recruiters.
In closing, the following (2 minute) video provides a helpful introduction to the WSJ, providing time-saving tips to help you get the most from WSJ and succeed not only in Finance 4366 but also in your other courses and careers:
A course blog has been established for Finance 4366 at the address http://derivatives.garven.com; it is also linked from the “Course Blog” button located on the course website. This resource provides a convenient means for Dr. Garven to distribute important announcements outside of class. Topics covered on the course blog typically include things like changes in the course schedule, clarifications, and hints concerning problem sets, information about upcoming exams, announcements concerning extra credit opportunities, and short blurbs showing how current events relate to many of the topics covered in Finance 4366.
All students enrolled in Finance 4366 are required to subscribe to the course blog via email. Students may also follow the course blog on Facebook or Twitter but are not required to do so.
Email Subscription Instructions:
In order to subscribe to the course blog via email, go to derivatives.garven.com and enter your email address in the form provided on the right-hand side of that webpage:
After clicking “Subscribe”, the following information will appear on your screen:
Next, check for an email from “Options, Futures, and Other Derivatives <email@example.com>”:
Next, simply click the “Confirm Follow” button. This will cause you to receive the following email:
From that point forward, whenever I post to the course blog, you will immediately receive a nicely formatted version of the blog posting via email.