Course title: Introduction to finance 
Teacher: N. Gaussel
UE 1

18 hours (2.5 ECTS) Evaluation: 
Presentation:
The goal of the course “ Introduction to Finance ” is to present the fundamental tools that are used in Market Finance to value portfolios and investments. These notions are applied in a very wide range of contexts, as for example in Trading, Market Risk, Counterparty Credit Risk, Model validation, Asset Liability Management, Portfolio Management, etc.

1. We’ll start with the concept of Future and Present values of cash-flows known for sure to compare investments and see which ones are preferable, define interest rates and yields, which are shortcuts (sometimes misleading), used historically and still commonly used.
   
2. We’ll then talk about standard financial products and how to price them:
   
   • Bonds, clean and dirty prices, yields to maturity, duration and convexity and their appli- cation to hedges
     
   • Swaps, which will also make an introduction to the standard modeling framework in Finance
     
3. Modeling
   
   • A rather qualitative introduction to Ito processes, why we use them in Financial modeling a quick summary of stochastic calculus as commonly used in Finance
     
   • We’ll apply these stochastic notions to the pricing of derivative products (Swaps, Euro- pean calls and puts) and how to hedge them theoretically and talk about the notion of smile of volatility
     
   • Some other standard derivatives will also be introduced
     This course is also meant to put you in position to answer to standard questions when looking for an internship.