This unit provides an introduction to financial risk management. It deals with the investment decision making process, derivative markets and securities, pricing, risk management and trading strategies. Topics include: forwards and futures, options, warrants, swaps, exotics, derivative valuation models, and hedging and trading techniques.
Topic 1 Introduction to derivative markets
Topic 2 The mechanics of forward and futures market
Topic 3 Principles of pricing forward and futures
Topic 4 Hedging strategies using forward and futures
Topic 5 Swaps
Topic 6 The mechanics of options markets
Topic 7 Option pricing models: Binomial and Black-Scholes-Merton
Topic 8 Trading strategies involving option
Topic 9 Financial risk management techniques and applications
Topic 10 Derivatives mishaps and lessons
Unit Learning Outcomes express learning achievement in terms of what a student should know, understand and be able to do on completion of a unit. These outcomes are aligned with the graduate attributes. The unit learning outcomes and graduate attributes are also the basis of evaluating prior learning.
Learning outcomes and graduate attributes
|On completion of this unit, students should be able to:||GA1||GA2||GA3||GA4||GA5||GA6||GA7|
|1||Evaluate risks associated with financial asset ownership||Intellectual rigour||Creativity||Knowledge of a discipline|
|2||Discuss the characteristics of financial derivative securities||Knowledge of a discipline||Cultural competence|
|3||Value financial derivatives using appropriate models||Intellectual rigour||Knowledge of a discipline|
|4||Implement risk management and trading strategies using financial derivatives||Intellectual rigour||Creativity||Knowledge of a discipline|
|5||Discuss the value of derivative securities in the current financial environment||Intellectual rigour||Creativity||Knowledge of a discipline|
- Chance, DM & Brooks, R, 2013, An Introduction to Derivatives and Risk Management, 9th edn, South-Western, Mason, OH, USA. ISBN: 13- 9781133190196.
Teaching and assessment
|Lecture online 1 hour (12 weeks)|
|Short written response||20%|
|Short written response||30%|
|Exam: closed book||50%|
Commonwealth Supported courses
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Commencing 2017 Commonwealth Supported only. Student contribution band: 3
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