Don M. Chance
Instructional Web Page

The links on this page send you to various sites with teaching related material.

Courses I teach:

In the spirit of open courseware, I will send you all of the material from the two courses I currently teach, FIN 7400:  Financial Risk Management, an advanced MS/MBA elective, and BADM 7090, the core course in finance for the MBA program.  Email me if you want these materials.

Teaching Notes:

The following items are called Teaching Notes.  These are short technical notes in pdf format.  I use them to fill in material not covered or not adequately covered in a specific book I might be using.  Every effort has been made to ensure typographical and technical accuracy, but no guarantees are made.  If you find any errors, please let me know.

SPECIAL FOR THOSE WANTING TO LEARN DERIVATIVES:  These notes are in the order in which I wrote them and do not build on each other.  Go to this page for a suggested course of study that tells you which order you should read these notes if you are using them to learn derivatives in general.

(FONT PROBLEMS?  Many of these files were created when I used WordPerfect.  I then converted them to Word but in some cases, they retained old fonts from WordPerfect.  You may have trouble reading some of these due to font difficulties.  If you do, please let me know (dchance@lsu.edu) and I will fix it.)

• Mathematical, Statistical, and Economic Foundations
  • Teaching Note 97-01:  The Normal Probability Distribution (September 27,2012)
  • Teaching Note 97-05:  The Bivariate Normal Probability Distribution (July 23, 2008)
  • Teaching Note 99-03:  Mathematics Review for Finance (July 23, 2008)
  • Teaching Note 99-04:  Probability and Statistics Review for Finance:  Part I (July 18, 2008)
  • Teaching Note 00-06:  Probability and Statistics Review for Finance:  Part II (July 18, 2008)
  • Teaching Note 00-07:  The Reflection Principle in Finance (October 5, 2010)
  • Teaching Note 07-01:  The Bernoulli Paradox (July 23, 2008)
  • Teaching Note 09-01:  Basic Concepts in Valuing Risky Assets and Derivatives (November 29, 2010)
• Option Pricing
  • Teaching Note 96-02:  Risk Neutral Pricing in Discrete Time (July 24, 2008)
  • Teaching Note 96-04:  Modeling Asset Prices as Stochastic Processes I (July 18, 2008)
  • Teaching Note 96-05:  Ito's Lemma and Stochastic Integration (July 18, 2008)
  • Teaching Note 97-13:  Option Prices and State Prices (July 18, 2008)
  • Teaching Note 98-01:  Closed-Form American Call Option Pricing: Roll-Geske-Whaley (July 24, 2008)
  • Teaching Note 98-02:  Analytic Approximation of American Option Prices: Barone-Adesi-Whaley (July 18, 2008)
  • Teaching Note 98-03:  Closed-Form American Put Option Pricing: Geske-Johnson (July 18, 2008)
  • Teaching Note 98-04:  Exchange Option Pricing (August 29, 2011)
  • Teaching Note 98-05:  Compound Option Pricing (July 18, 2008)
  • Teaching Note 98-06:  Rainbow (Min-Max) Option Pricing (July 18, 2008)
  • Teaching Note 99-02:  Derivation and Interpretation of the Black-Scholes Model (June 3, 2011)
  • Teaching Note 99-05:  Rational Rules and Boundary Conditions for Option Pricing (July 25, 2008)
  • Teaching Note 00-01:  Linear Homogeneity, Euler's Rule, The Black-Scholes Model, and an Application to Forward-Start Options (July 26, 2012)
  • Teaching Note 00-03:  Modeling Asset Prices as Stochastic Processes II (July 8, 2008)
  • Teaching Note 00-04:  Girsanov's Theorem in Derivative Pricing (July 18, 2008)
  • Teaching Note 00-05:  Brownian Motion:  From Discrete to Continuous Time (July 12, 2010)
  • Teaching Note 00-08:  Convergence of the Binomial to the Black-Scholes Model (July 8, 2008)
  • Teaching Note 03-01:  Option Prices and Expected Returns (August 7, 2008)
  • Teaching Note 04-01:  The Volatility Smile (August 7, 2008)
  • Teaching Note 11-01:  The Isomorphism of Foreign Currency Calls and Puts (January 6, 2011)
• The Term Structure and Interest Rates
  • Teaching Note 97-03:  The Vasicek Term Structure Model (August 7, 2008)
  • Teaching Note 97-04:  The Cox-Ingersoll-Ross Term Structure Model (August 7, 2008)
  • Teaching Note 97-14:  Binomial Pricing of Interest Rate Derivatives (August 15, 2008)
  • Teaching Note 00-02:  The Local Expectations Hypothesis (August 15, 2008)
  • Teaching Note 01-01:  Zero Coupon Bond Prices and Interest Rate Quotation Conventions (August 15, 2008)
  • Teaching Note 01-02:  Introduction to Interest Rate Options (August 15, 2008).
  • Teaching Note 02-01:  The Heath-Jarrow-Morton Term Structure Model (August 19, 2008)
  • Teaching Note 05-01:  The Pricing and Interest Sensitivity of Floating-Rate Securities (August 19, 2008)
• Forwards, Futures, and Swaps
  • Teaching Note 97-06:  Pricing and Valuation of Interest Rate and Currency Swaps (July 5, 2012)
  • Teaching Note 97-08:  Pricing and Valuation of Commodity Swaps (August 19, 2008)
  • Teaching Note 97-15:  Pricing and Valuation of Equity Swaps (August 20, 2008)
  • Teaching Note 05-03:  A Generalization of the Cost of Carry Forward/Futures Pricing Model (August 20, 2008)
  • Teaching Note 12-01:  Pricing and Valuation of Amortizing Interest Rate Swaps (July 16, 2012)
• Numerical and Computational Methods
  • Teaching Note 96-03:  Monte Carlo Simulation (January 11, 2011)
  • Teaching Note 97-02:  Option Pricing Using Finite Difference Methods (August 21, 2008)
  • Teaching Note 97-12:  Calculating the Black-Scholes Value (August 21, 2008)
  • Teaching Note 99-01:  Solving Linear Equations in Excel (August 21, 2008)
  • Teaching Note 05-02.  Calculating the Greeks in the Binomial Model (June 10, 2010)
• Trading and Risk Management
  • Teaching Note 97-07:  Value-at-Risk (VaR) (August 22, 2008)
  • Teaching Note 97-10:  An Overview of Option Trading Strategies: Part I (August 22, 2008)
  • Teaching Note 97-11:  An Overview of Option Trading Strategies: Part II (August 22, 2008)
• Credit Risk
  • Teaching Note 96-01:  Default Risk as an Option (July 18, 2008)
  • Teaching Note 97-09:  Credit Derivatives (August 22, 2008)
  • Teaching Note 09-02:  Understanding the Cash Flows in Collateralized Debt Obligations (December 17, 2009)

MBA Teaching Notes

These items were written for my MBA introductory course in finance.  They are designed to supplement and elaborate on certain material that is not covered adequately in the text.  I may add some more from time to time.  These notes are distinguished from the ones above by the fact that these are relatively non-technical in comparison to those above.

• MBATN07-01:  The Change in Net Working Capital in a Capital Investment Project (November 16, 2008)
• MBATN07-02:  Some Problems with the Profitability Index (December 18, 2007)
• MBATN07-03:  Derivations of Present Value Formulas (December 18, 2007)
• MBATN07-04:  Some Problems in Capital Budgeting Terminology (December 2, 2009)
• MBATN07-05:  Geometric and Arithmetic Rates of Return (December 18, 2007)
• MBATN07-06:  The Capital Asset Pricing Model, Stock Pricing, and Expected and Required Returns (December 18, 2007)
• MBATN07-07:  Margin Trading and Short Selling (November 16, 2008)
• MBATN08-01:*
• MBATN08-02:  Net Present Value Analysis of the Purchase of a Hybrid Automobile (December 2, 2009)
• MBATN08-03:* 
• MBATN09-01:  Summary of Present Value and Net Present Value Concepts (December 2, 2009)
• MBATN10-01:  Measuring Market Movements with Stock Indexes (November 22, 2010)
• MBATN10-02:  How the Economy Works, What Causes a Recession, and What to do About It (November 22, 2010)
• MBATN10-03:  The Fundamental Principle of Arbitrage (December 19, 2010)

*MBATN08-01 (Calculating Your Wealth) has been removed because I now use it as a presentation during our MBA orientation.  If you are interested in this case and spreadsheet, email me at dchance@lsu.edu.  MBATN08-03 has also been removed.

Other Useful Information

• The 10 Most Common Writing Mistakes (in my humble opinion)
• Advice for Graduating Seniors and Graduate Students
• My Teaching Philosophy

Back to my main web page

Last updated:  January 10, 2013