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CCLE026 Financial Models and Derivatives in a Legal Context

Module Description

This course introduces complex concepts in finance at a level that is appropriate for law students to master them. The first part of the course introduces the student to basic understanding of financial models and concepts as it relates to valuation in a legal context. This knowledge forms the basis of analysis for the more complex and broader concept of derivatives. The focus eventually turns to the analysis of “derivative” instruments, their application in different economic situations, and the benefits/consequences of helping clients set up contracts employing them when investing or conducting business, both locally and globally. Derivative instruments will be analysed from two separate points of view: speculative and hedging. Tools and basic models that help in understanding the appropriate usage of different derivatives in different situations will also be introduced and examined. Through the course analysis, students will develop a thorough understanding of the models that influence and eventually determine the relationships among different derivative instruments. Legal cases are used to analyse actual situations and explore different possible solutions using financial models and derivatives, facilitating an acceptable legal determination as to the best selection for every particular exposure. The course will be taught on the assumption that the students have no prior knowledge of these financial instruments.

Prerequisites

Students wishing to attend this module should note the following:

  1. You should have basic math knowledge, and the ability to handle some math applications using Excel spread sheets.
  2. Some financial exposure is highly recommended.
  3. Willingness to participate in class group activities.

Applicable Groupings

MSc Law and Finance programme only

Mode of Assessment

2 course essays of 7,500 words (each 50%).

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