ACS 3740 - Introduction to Asset Pricing

3 lecture hours 0 lab hours 3 credits

Course Description
This course is an introduction to mathematical pricing models used in economics and finance. The course serves as a fundamental step toward mathematical risk analysis. The objectives include recognizing major types of financial products, discussing how the pricing mechanism is developed from basic principles in economics and finance, and evaluating the risk-neutral prices of common financial products.
Prereq: ACS 2740, MTH 2610 (quarter system prereq: MA 2630 or Actuarial Science program director consent)
Note: None
This course meets the following Raider Core CLO Requirement: None

Course Learning Outcomes
Upon successful completion of this course, the student will be able to:

Comprehend various types of financial products and when to use them
Distinguish hedge from arbitrage
Identify risks and determine appropriate financial products for hedging
Understand fundamental principals in asset pricing theory
Explain mathematical asset pricing models and the meaning of risk-neutral pricing
Evaluate fair price of major financial derivatives and insurance policies in discrete time set-up
Analyze business situations and propose financial strategies
Communicate effectively in written and verbal forms

Prerequisites by Topic

Basic concepts of microeconomics and finance
Risk management and insurance
Probability

Course Topics

Financial derivatives
Hedge and arbitrage
Concepts of risk-neutral pricing
Law of one price
Asset pricing theory

Coordinator
Dr. Yu-Sin Chang

Announcement

The Raider Return

Milwaukee School of Engineering

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ACS 3740 - Introduction to Asset Pricing