Financial Instruments and Markets: A Casebook

Create value while you manage risk
Today’s increasingly volatile financial markets have caused an explosion of new financial instruments designed to transfer risk––from collateralized mortgage-backed securities to swaptions that trade directly between financial actors. And now these complex financial instruments have become standard operating procedure at most large and mid-sized businesses. Managers overseeing any substantial business, financial or non-financial, must thoroughly understand these financial instruments and their value in hedging and diversifying to succeed.

With this unique casebook, you’ll have the opportunity to gain the analytical, institutional, and functional knowledge you need to use these instruments to solve new problems. Featuring cases from the authors’ MBA and Executive Education level courses at Harvard Business School, the book covers the basics of financial instruments, from terminology to pricing, and the markets in which these instruments trade. Throughout, the emphasis is on how these securities accomplish risk transfer from actors who do not want risk to those who are willing to take it on—for a fee of course.

These cases include:

• Deutsche Bank: Finding Relative Value Trades
• Ticonderoga Capital: Inverse Floating Rate Bonds
• 100-Year Liabilities at Prudential Insurance
• Swedish Lottery Bonds
• The Enron Odyssey: The Special Purpose of SPEs
• Building Hedge Funds at Prospero Capital
• Dell Computer Corporation: Share Repurchase Program
• First American Bank: Credit Default Swaps
• Morgan Stanley and TRAC-X: The Battle for the CDS Indexes Market
• and more