 Man this is like trying to hit a 60-foot putt. Okay, let's see if I can hit the ball. Head down, slow. Whoa! That was a great shot. As us golfers say, dead, solid, perfect. Anyhow, hi I'm Andy Klee. I'm your instructor for EBF 473 Financial Risk Management. Let me try to hit another shot. We'll be able to do as well as the first shot. Oh, that wasn't bad either. Why golf? Well, there are two things if you don't play you might want to know about golf. First of all, you always forget your bad shots and remember your good shots. So let's see if I can make this a good shot. No, that was terrible. Lift my head. The second thing is that golf courses are some of the most beautiful places in the world. And in particular, where I am here at the Skytop Golf Course outside of State College. I don't know if you can see, but you look over the beautiful, most Shannon Valley. It's a beautiful, sunshiney day and it always lifts my spirits to come out here. And of course, when you play golf, you've got equipment. So I've got these special shoes with, well, you don't call them spikes anymore. I don't know what we call them. Then I got a glove like this to stop my hands from getting blisters. And then I have a hat. Now I suspect if you've looked at my picture, you understand why I have a hat. This particular hat has the logo of my favorite sports team, the Boston Red Sox. You know, you don't choose your sports team. It's like the wand in the Harry Potter stories. It chooses you. So this is my team and I'm stuck with them. I just hope they win tonight. So what is this class about? It's about financial risk management. Now you may think the point of the class is how to teach you how to make money. But the truth of the matter is none of your professors can teach you how to make money. But we're going to try to teach you an important skill, how not to lose money. And pretty soon some of you will be in big financial trading houses and you'll be entrusted with your firm's money, a lot of money. And they will expect you to protect it. And today we're going to start on our journey about how to learn how. How to save the money. So to start, well, to start, excuse me, I got to hit a golf ball. Hey, that wasn't bad. That wasn't bad. Anyhow, maybe I'll try out for the senior tour. Anyhow, so what are we going to talk about? Well, in this class, first we're going to talk about very important financial assets called puts and calls. Then we'll review statistics and we'll explain why statistics are your friend. You might have wondered why we mad you take that harder statistics class. It's so you could get ready for this class. Next we'll teach you how to price those calls and puts. And then we'll talk about how to use these assets, these options, to hedge your position and engage in risk management. And all through the class we'll talk about famous financial disasters where the firm in question did not engage in risk management and bad, bad things happen to you. Anyhow, I hope you'll enjoy taking this class as much as I enjoy teaching. I got to be honest with you, this class is challenging, but it's by no means impossible and a lot of students will get A's. The trick, the trick is to work on this class a little bit on most A's. If you never ever ever try to cram, your head will hurt, ouch, like you've been hit by a golf ball. Remember, you have to do all the practice questions to be successful. If you have trouble, please send me a question on the class discussion panel. Okay, time to see if I can actually play this game. Thanks a lot, see you soon. Whoa, best shot of the day!