STOCHASTIC FINANCE I
Financial market. Financial instruments: bonds, stocks, derivatives. Binomial no-arbitrage pricing model: single period and multi-period models. Martingale methods for pricing. American options: the Snell envelope. Interest rate dependent assets: binomial models for interest rates, fixed income derivatives, forward measure and future. Investment portfolio: Markovitz�s diversification. Capital asset pricing model (CAPM). Utility theory.