DERIVATIVE SECURITIES

FIN3FDR

Not currently offered

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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Subject not currently offered - Subject options not available.