Bonds, Equities, Derivatives & CVA: Pricing Risk Masterclass

Explore the income statement, from revenue recognition and cost of goods sold (COGS) to gross profit, operating income, and net income, and learn to read ratios for profitability and growth.

Master the balance sheet by analyzing assets, liabilities, and equity, assessing liquidity, asset quality, and financial leverage, and applying horizontal, vertical, and ratio analysis to value solvency and risk.

Explore the cash flow statement to understand cash movement, liquidity, and the links between operating, investing, and financing activities, including free cash flow to equity.

Explore how the income statement, balance sheet, and cash flow statement connect to reveal profitability, cash flow, and financial health through accruals, working capital, and financing.

Explore equity fundamentals, including common and preferred shares, ownership, dividends, share classes, and how corporate actions like mergers or buybacks affect shareholder value.

Learn equity valuation by estimating the present value of future dividends using the dividend discount model and the Gordon growth model, with CAPM-driven required return and sustainable growth.

Explore how free cash flow to equity, relative valuation multiples, and residual income models shape intrinsic value and investment decisions, considering risk, return, and discount rates.

Explore market beta and CAPM to link systematic risk with expected returns, guiding valuation, portfolio construction, and risk-based discount rates.

Explore multi-factor asset pricing with APT and Fama-French factors, analyze volatility dynamics and dynamic correlations, and integrate liquidity risk into portfolio construction and risk management.

Explore practical equity valuation tools, including a professional Excel template and a modular Python script, for DCF, comparable analysis, scenario testing, and scalable automation.

Master the time value of money to compare cash flows for loan pricing and bond valuation using present value, discounting, net present value, internal rate of return, duration, and convexity.

Master present value and future value, the two building blocks of the time value of money, with compounding frequency, discount rates, and concepts like NPV, IRR, duration, and bond pricing.

Learn how discounting converts future cash flows into present value using discount factors and discount rates, enabling bond pricing, net present value analysis, and project valuation.

Master net present value NPV as the gold standard of corporate finance by evaluating cash inflows and outflows through time value of money, using the discount rate to decide projects.

IRR is the discount rate that makes net present value zero, the break-even rate of return, guiding decisions when IRR exceeds the required return and should be compared with NPV.

Apply the time value of money to bonds by pricing coupons and face value through present value, and see how yield, compounding, and zero-coupon pricing drive discount, par, or premium.

Explore practical examples of npv and irr, including simple project analysis, mutually exclusive projects, and the multiple irr problem, showing how npv guides value creation in finance and risk management.

Calculate and interpret duration as the primary sensitivity measure for fixed income, linking cash flow timing to price changes, using Macaulay and modified duration to manage interest rate risk.

Explore how convexity extends duration by capturing the curvature in bond price–yield relations, improving risk management and predictions for larger rate moves in a 3-year bond example.

Explore how duration and convexity quantify bond price sensitivity and refine risk forecasts for portfolios. Implement immunization, stress testing, and convexity-aware portfolio optimization to manage yield-curve shifts.

Compare valuation and risk methods by examining NPV, IRR, duration, and convexity, outlining when each best supports capital allocation, project valuation, and bond risk management.

Master the fundamentals of options, including hedging, speculation, and arbitrage. Learn call and put mechanics, moneyness (itm, atm, otm), time value, and the Greeks.

Explain put-call parity and arbitrage under the law of one price, showing how call minus put equals stock minus the present value of the strike, enabling synthetic hedges.

Explore one-step and multi-step binomial option pricing, derive delta and hedges through replication, and see risk-neutral valuation converge to Black-Scholes for European and American options.

Explore American options and their early exercise feature, compare them with European options, and outline the optimal exercise boundary. Study valuation methods—binomial trees, finite difference, and least squares Monte Carlo.

Master the Black-Scholes-Merton model, a closed-form European option pricing framework built on Geometric Brownian motion, risk-neutral valuation, and dynamic hedging, including the greeks delta, gamma, vega, theta, and rho.

Examine the Black-Scholes-Merton framework for European options, using geometric Brownian motion, dynamic hedging, and risk-neutral pricing to derive the closed-form formula and key Greeks.

Master options greeks to quantify risk with delta, gamma, theta, vega, and rho; learn hedging strategies, gamma scalping, and how these signals drive pricing decisions.

Learn delta hedging and risk management for options: achieve delta neutrality through dynamic rebalancing, manage gamma, vega, theta, and higher-order Greeks amid costs and jump risk.

Extend Black-Scholes to dividends, fx, and commodities by adjusting spot and forward prices with yields, rates, storage costs, and convenience yield.

Learn real-world option strategies used by traders to express directional views, trade volatility, and manage risk, including vertical spreads, straddles, covered calls, protective puts, and calendar spreads.

Explore the core components of fixed income, including issuer, maturity, coupon, and face value, and learn how prices, yields, and conventions drive bond valuation.

Explore term structure of interest rates, including spot and forward rates. Apply zero and par curves, yield curve shapes, bootstrapping, and derivatives valuation to bond pricing and risk management.

Master bond pricing foundations by linking present value to future cash flows via discounting, discount factors, and yield to maturity, then apply duration, convexity, and clean versus dirty pricing.

Explore how duration measures bond price sensitivity to interest-rate moves, detailing Macaulay duration, modified duration, effective duration, and key rate durations for fixed-income and portfolio risk management.

Extend the duration framework and introduce convexity to improve non-linear price sensitivity under volatile rate moves. Learn how convexity captures curvature, informs risk management, stress testing, and portfolio strategies.

Master DV01 and PV01 to translate rate moves into currency-based risk, enabling real-time hedging, P&L attribution, and precise pricing for bonds, swaps, and fixed-income portfolios.

Master spread measures in fixed income, including Z-spread, OAS, G-spread, and I-spread, to assess credit and liquidity risk, decompose spreads, and position portfolios through the credit cycle.

Explore how repos, bond futures, and interest rate swaps power liquidity, hedging, and risk management in modern fixed-income markets.

Explore the full spectrum of bond risks—interest rate risk, reinvestment risk, credit risk, spread risk, liquidity risk, inflation risk—and see how duration and scenario analysis shape prices.

Explore how derivatives transfer risk, enable price discovery, and boost liquidity across equities, interest rates, foreign exchange, and commodities, with insights into exchange-traded and over-the-counter contracts.

Hedgers reduce real-world risk, while speculators provide liquidity and arbitrageurs keep prices fair. Dealers connect participants through risk transfer and market intermediation, supported by clearinghouses and regulators.

Explore how forwards, futures, swaps, and options create linear and nonlinear payoffs, with convexity, intrinsic and time value, and break-even points, using payoff diagrams for pricing and risk management.

Explore arbitrage and fair pricing logic in modern derivatives, mastering the law of one price, no-arbitrage, and the cost-of-carry framework to connect spot and futures prices.

Consolidate key derivatives concepts, including forwards, futures, options, and swaps. Decode terminology, understand payoff structures, and prep for FRM and CFA with a practical quiz.

Explore call and put mechanics, rights and obligations, and how premiums, strike prices, and expiry define moneyness and payoffs, with long and short positions and payoff diagrams.

Explore put-call parity, the foundational european options relation linking calls, puts, the underlying stock, and the risk-free bond, and reveal no-arbitrage-driven arbitrage opportunities and synthetic positions.

Explore how discrete-time binomial trees use risk-neutral probabilities, up and down factors, and no-arbitrage to price european call and put options and guide replication.

Explore implied volatility as the market's forward-looking view embedded in option prices. Map the volatility surface, including smiles and skews, for trading and risk management and model calibration.

Unify forwards, options, and swaps under a single no-arbitrage framework, mastering risk-neutral pricing, binomial valuation, parity checks, and implied volatility for FRM Module 5 readiness.

Bridge intuition and mathematics through the Black-Scholes framework, risk-neutral pricing, and delta hedging to replicate European call and put payoffs under continuous time.

Explore how delta, gamma, vega, theta, and rho translate pricing models into actionable option risk insights, guiding hedging, volatility management, and rate-sensitive pricing.

Master delta neutral hedging, gamma and vega management, and theta trade-offs to control p&l volatility, decompose daily profits via Greeks, and manage nonlinear exposures across portfolios.

Explore portfolio greeks across hundreds of positions, perform scenario-based hedging, and integrate sensitivities into firm-wide risk and capital frameworks, linking VAR and Basel III and IFRS 9 for risk governance.

Explore how greeks shape trading strategies, risk management, and capital allocation, linking delta, vega, theta, gamma, and rho to Basel 3.1, CVA, and performance analytics.

Apply integrated valuation and risk analysis by pricing three european options with Black-Scholes, calculating portfolio greeks, hedging delta and vega, and linking results to capital and risk governance metrics.

Learn how portfolio risk arises from asset interactions, using covariance and correlation within a variance-covariance framework to quantify diversification benefits and distinguish systematic from idiosyncratic risk.

Explore the foundations of value at risk (VAR), including confidence level, horizon, and loss quantile, and compare parametric, historical, and Monte Carlo methods for measuring tail risk.

Evaluate portfolio resilience with stress testing, scenario analysis, and sensitivity analysis under Basel 3.1. Build forward-looking capital plans using multi-factor shocks, reverse stress testing, and P&L-to-capital links.

Explore cross-hedging and portfolio hedging techniques, including optimal hedge ratios, correlation dynamics, and performance metrics to reduce exposure with basis risk in practice.

integrate var, stress testing, and greeks into a holistic portfolio risk framework that links analytics to governance, capital allocation, raroc, and risk-adjusted performance metrics.

Learn counterparty credit risk basics, including dynamic, bidirectional exposure in derivatives, expected exposure and potential future exposure, and how netting and collateral reduce losses under Basel regulations.

Explore how default unfolds in over-the-counter derivatives through mark-to-market valuations, close-out procedures, and collateral dynamics, and examine how replacement cost drives counterparty credit risk and CVA pricing.

Explore exposure at default for derivatives under SACCR vs IMM, detailing current exposure, potential future exposure, replacement cost, PFE, collateralization, netting, and Basel 3.1 implications.

Understand how EE, EPE, and PFE describe how exposure evolves for derivatives, including over-the-counter products, and how collateral, netting, and initial margin shape CVA pricing and CCR capital.

Explore how netting and collateral via the CSA reduce exposure and shape CVA, EE, EPE, and PFE, detailing VM, IM, thresholds, MTA, haircuts, and MPOR.

Explore wrong-way risk and its mirror, right-way risk, showing how exposure, default probability, and loss given default interact to amplify losses in derivatives under Basel 3.1 and CVA.

Learn how credit valuation adjustment CVA prices the market price of counterparty default risk by integrating exposure, PD, collateral, and wrong-way risk into a discounted loss framework.

Analyze real cva shocks across fx, interest-rate swaps, commodities, and equities, showing how wrong-way risk, collateral, saccr, pd, mtm, and lgd drive p&l.