Module 2 — Asset Management, MBA

In the second module, we are considering financial instruments. First we start with stocks and bonds, the most basic securities at capital markets. Then, we will explore mutual funds and indices including the diversification effect, which is the basis for portfolio management. In 1990, Harry Markowitz was awared with the Nobel Prize for this idea!
Based on stocks, bonds, and indices other products are created: derivatives. We need these instruments for risk management purposes (→ see Module 3) oder and for financial engineering of other products such as retail certificates. By the way… Myron Scholes and Robert Merton have been awarded with the Nobel Prize, too… for their option pricing formula in 1997.

During the module, you learn how the financial instruments work and how they can be priced. Therefore, we intensively use Excel® for pricing, sensitivity analysis, and portfolio construction.



  1. Stock Valuation
    – Discounted Cash Flow (Case Study)
    – Multiples
  2. Bond Valuation
    – Accrued Interest
    – Effective Interest Rate
    – Duration
  3. Indices, Funds, and ETFs
    – Index calculations (Dow Jones, DAX)
    – Net Asset Value
    – Tracking Error
  4. Portfolio Management
    – Naive Diversification
    – Corrleations
    – Minimum Variance Portfolio
    – Optimal Portfolio
  5. Derivatives
    – Futures
    – Options
    – Option Strategies
  6. Retail Certificates
    – Discount Certificates
    – Floor Certificates
    – Bonus Certificates