This course is designed to provide a solid foundation in the principles of financial derivatives and risk management.  It attempts to strike a balance between institutional details, theoretical foundations, and practical applications. The course equally emphasizes pricing and investment strategies in order to motivate students to start thinking about risk management in financial markets. Parallel to the already increasing attempts to integrate derivative securities and markets into the Turkish financial system, it is believed that this course will fill a gap and students will be exposed to a rather comprehensive coverage of theory and application in the derivatives area. This course is expected to give the students a “competitive advantage” when they enter the job market since “derivatives” is a “hot topic” nowadays and IAM520 is one of the very few courses offered on this topic in Turkey!