FE 625 Emerging Markets: Risks and Models
This course covers the basics of Emerging Markets instruments, models, risks, hedging and trading practices. Emerging Markets have seen a dramatic increase in volume, especially since the latest crisis in the developed markets. Geographically the course will be focused on the 4 BRIC countries (Brazil, Russia, India and China) and Mexico. The student should develop a deep understanding of the main differences between Developed Markets and Emerging Markets risk and trading. Many of the unique attributes and models in Emerging Markets have now been adopted by Developed Markets since the 2008 crisis, given students an edge in understanding the latest trends in the markets. Main topics to be covered include: funding in EM; XC basis markets; OIS and local collateralization; Credit Valuation Adjustment (CVA); Extinguishable XC swaps; Inflation indexes and inflation currencies; Capital Constraints, Convertibility and Transferability.