Financial Instruments and Markets

Thursday, October 14

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00 Recent Developments in Global Financial Markets

• Brief History of Market Developments
• Overview of Types of Financial Instruments and Markets
• The Global Financial Crisis and the European Debt Crises
• Regulatory Reform and the Changing Financial Landscape

Equity Markets and Instruments

• Main Characteristics of Equity Instruments
• World Equity Markets
• The Role of Equity Instruments in Corporate Financing
• How Equities are Traded
  • Primary and secondary markets
  • Case study: “High Frequency Trading” and Its market impact (the “Flash Crash” etc.)
• Risk and Return Characteristics of Equity Investments
  • Historical performance
  • P/E, P/BV and other important ratios
  • Measuring equity risk in a portfolio context
• Practical Case Studies and Exercises

12.00 - 13.00 Lunch

13.00 - 16.30 Fixed Income Markets and Instruments

• Main Characteristics of Fixed Income Instruments
• Overview of Global Fixed Income Markets
  • Treasury bills and government bonds
  • CP’s and corporate bonds
  • Agency securities
  • Convertibles and other hybrid instruments
• How Fixed-Income Instruments Are Traded
  • Primary and secondary markets
• Risk and Return Characteristics of Fixed-Income Instruments
  • Historical performance
  • Interest rate risk, inflation risk
  • Credit risk, sovereign risk, prepayment risk and liquidity risk
  • Measuring risks in a portfolio context
• Case Studies and Exercises

Friday, October 15

09.00 - 09.15 Recap

09.15 - 12.00 Money and FX Markets and Instruments

• Global Money and FX Markets
• Types of Instruments
  • Deposits, T-Bills, CP's, CD's
  • Spot, forward and forward-forward transactions
• How the crisis has impacted the money and FX markets
• The Future of the Euro
• Measuring and Managing FX Exposure

Derivative Markets and Instruments

• General Introduction to Derivatives and their Characteristics
• Types of Derivates Instruments and Markets
• Forwards vs. Options
• Listed vs. OTC Markets
• Futures and Options Markets
  • Mechanics of futures and options
  • Practical examples of equity, index, currency and bond futures and options
  • How futures and options are traded
  • Using futures and options for hedging

12.00 - 13.00 Lunch

13.00 - 16.30 Derivative Markets and Instruments (continued)

• OTC Markets
  • FRAs, swaps, caps, floors and swaptions
  • Credit derivatives
  • The move to standardization and centralized clearing
  • ISDA “Big Bang” protocol
  • Using OTC derivatives in risk management and financial engineering
• Case Studies and Exercises

Structured and Leveraged Finance

• Asset-Backed Securities, CLO’s and CDO’s
• Synthetic and Hybrid Securitizations
• Leveraged and Hybrid Loans
• Case Study: The Goldman Sachs Abacus Deal

Evaluation and Termination of the Seminar