DERIVATIVE SECURITIES

FIN3FDR

2018

Credit points: 15

Subject outline

In recent years there has been a dramatic increase in the size and complexity of both the types of financial investments and the institutions which are involved in the markets for investment products. In order to reduce the risks associated with trading in these markets specialized markets for risk management called derivative markets have rapidly developed. Unfortunately in some cases these markets have increased rather than reduced the financial risks faced by individuals, corporations and even governments. The markets for financial derivatives have, in the words of Warren Buffett, become potential weapons of Financial Mass Destruction. This subject provides you with a roadmap which will help them to understand and effectively function in the world of Financial Derivatives. You will cover main types of financial derivatives such as forwards, futures, swaps, and options. The emphases is on how to price financial derivatives and how to use them in risk management.

SchoolLa Trobe Business School

Credit points15

Subject Co-ordinatorLily Nguyen

Available to Study Abroad StudentsYes

Subject year levelYear Level 3 - UG

Exchange StudentsYes

Subject particulars

Subject rules

Prerequisites FIN2FIN or FIN1FOF

Co-requisitesN/A

Incompatible subjectsN/A

Equivalent subjectsN/A

Special conditionsN/A

Readings

Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsOptions, Futures and other Derivatives.PrescribedJohn C HullPEAR COLLEGE DIV

Graduate capabilities & intended learning outcomes

01. Compare and contrast financial derivatives and their markets

Activities:
Lecture, tutorial questions, quiz, mid-term test, and final exam

02. Explain relevant financial theories and apply them to the pricing and valuation of financial derivatives.

Activities:
Lecture, tutorial questions, quiz, mid-term test, and final exam

03. Develop analytical and practical skills in trading financial derivatives and using financial derivatives to manage the risk exposure of an asset or a portfolio

Activities:
Lecture, tutorial questions, quiz, mid-term test, and final exam

Subject options

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Start date between: and    Key dates

Melbourne, 2018, Semester 1, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorLily Nguyen

Class requirements

Lecture Week: 10 - 22
One 2.0 hours lecture per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Tutorial Week: 11 - 22
One 1.0 hours tutorial per week on weekdays during the day from week 11 to week 22 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
Mid-term exam: 90 minutes35 01, 02, 03
One 2-hour final examination50 01, 02, 03
one 45 minutes written quiz15 01, 02, 03