We introduce the main topics required on typical recruiting interviews for job positions in Financial Engineering Derivative Trading and Risk Management within multinational financial institutions (e.g., investment banks, financial intermediaries), nonfinancial firms (e.g. international manufacturers, commercial corporations), and insurance companies. An inductive approach is adopted: we introduce all topics through practical examples and then identify general rules. We focus on, design, pricing, and hedging standard and exotic derivatives in equity, foreign exchange, interest rate, and commodity markets. Arbitrage Pricing Theory is developed within the framework of the Black-Scholes-Merton Model. A particular attention is put on corporate risk hedging and the structuring of financial products in deregulated energy markets. One-third of each class meeting is devoted to the solution of exercises and cases. We also present selected questions posed during interviews at Wall Street based investment banks and provide detailed answers to all questions by applying tools introduced along the course. This course is technical (as opposed to qualitatively descriptive) and should be attended by students showing a particular attitude and interest to quantitative analysis.

This course provides knowledge relevant for tackling recruiting interviews for financial related job positions at financial institutions and nonfinancial corporate entities, including investment banks as well as commercial, industrial, and insurance companies, amongst others. Our approach is technical (as opposed to qualitatively descriptive) and the course should be attended by students showing a particular attitude and interest to quantitative analysis. Most corporations and financial institutions face financial risks arising from changes in market variables such as interest rates, foreign exchange rates, commodity prices and stock prices. Because they offer low transaction costs and new profit patterns, forwards, futures, options and other derivative products have become essential tools for hedging financial risks and for leveraging on positions in financial markets. These products are usually more complicated than traditional cash instruments such as stocks and bonds and require correspondingly more than just basic analysis. This course provides students with a technically sound overview of various financial derivatives and their use. We discuss basic financial instruments and their derivatives products, as well as the characteristics of individual securities markets, their major market players, and how securities are priced in these markets. We particularly focus on acquiring major financial concepts (i.e., notions and relations) arising in area of basic derivative origination and trading, measuring the time value of money (i.e., interest rates, accrual rules, building a discount function), and structuring linear derivatives (e.g., pay-off definition, market valuation, and hedging). We highlight the tremendous flexibility that derivatives offer investors in designing investment strategies, and how derivatives can be used in managing financial risks. This is a fairly quantitative course and draws upon analytical tools and theories developed throughout the course. Examples and exercises are a fundamental part of the course.

We prepare the course participant to effectively tackle recruiting interviews for job positions in a large variety of market segments, ranging from financial product origination at major financial institutions, to financial risk management at mid and large size nonfinancial corporations acting in the domain of commercial and industrial transformation processes, passing through raw material and commoditized service providers and retailers. This course features a number of specific learning goals: 1) Understanding the process of Enterprise Risk Management (ERM) (Examples: risk matrix, internal process, position metrics, risk metrics, optimal hedging.) 2) Acquiring proficiency in major concepts, and their calculus, arising in risk management for corporate entities. (Examples: spot-forward parity, security design and pricing, problem solving, exploiting basic trading opportunities.) 3) Structuring corporate financial hedges (i.e., trading strategies and derivatives) against financial and nonfinancial corporate exposure to uncertainty. (Examples: futures portfolios, structured packages, custom hedges.). As an additional key feature, we propose to surf over the frontier of knowledge by attending webinars held at the Energy and Commodity Finance Research Center (http://energy-commodity-finance.essec.edu. This course is technical (as opposed to qualitatively descriptive) and should be attended by students showing a particular attitude and interest to quantitative analysis