The first three lectures of this Topics course will discuss the statistical analysis of heavy-tailed phenomena for financial risk management. Then additional topics to be covered are jump diffusion models, the theory of options with early exercise features, and pricing formulas for fixed income derivatives such as bond options, swaps, swaptions, and interest rate futures. The first two topics will be based on Shreve, Stochastic Calculus for Finance, Vol. II, Chapters 8 and 11. Prerequisite: Stochastic Calculus for Finance II 46-945, Simulation Methods for Option Pricing 46-932.