FINM3405 - Derivatives and Risk Management
1.General Course Information
1.1 Course Details Course Code:FINM3405
Course Title:Derivatives and Risk Management Coordinating Unit: School of Business
Semester:Semester 2,2023 Mode:External
Level:Undergraduate
Delivery Location:External (administered at St Lucia)
Number of Units:2 Pre-Requisites:
FINM2401 or 2411 or 2412 or 2416
Course Description:ntroduces forwards,futures &options as securities forisk management&speculation.Exposures to equity currency,interest rate &commodity risk are examined.Pricing derivatives usinganalytical &numerical techniques.
Assumed Background:
it is beneficial for students to have at least completed an Introduction to Finance coursetogain an understanding of valuation principles and risk concepts.Studentswill also benefit from having completedFINM2415(previously FINM3401).
Before attemptingthis course,students are advised thatit is important to complete the appropriate prerequisite course(s)listed on the front of this course profle.No responsibity willbe accepted by the School of Business,the Faculty of Business,Economics and Law or the University of
Queensland for poor student performance occuring in courses where the apropriate prerequisite(s)has/have not been completed,for any reason whatsoever.
1.2 Course Introduction
In the last three decades,there have been some remarkable losses seenin the financial markets,for example,the October 1987 market crash,1998 LTCMcrisis and the 2007-2008 subprime mortgage crisis,to name buta few.Accordingly,organisations have embracedsoundrisk management practices toavoid exposing themselves to unnecessary financial risks on the onehand,and taking calculated risks on the other In particular, organisations have embraced derivatives as a risk management and hedging vehicle tothe extent that many corporations now feature risk management divisions.Itis likely that risk management issues will continueto arise in the majorityof business scenarios.With these in mind, thiscourse is designed to equip students with the essential rameworks and tools needed to understand and effectvely manage financial risks.The primary focus will be on pricing derivatives,particularly forward,futures,options and swaps,using variousstate-of-the-art techniques.
Course Changes in Response to Previous Student Feedback
1.3 Course Staff
Course Coordinator:Dr Yong Ming Chen
1.4 Timetable
Timetablesare available on the UQ Public Timetable.(https://my.uq.edu.au/public-timetable)
2.1 Course Aims
The aims of the course are for the student togain a solid understandingof ()the operation of derivatives markets,(i)a widerange ofderivative products and how they can be used to manage and speculate risk,and of (ii valuing derivatives (particularlyforward,futures,options and swaps) using different analytical and numerical methods.
2.2 Learning Objectives
Aftersuccessfully completing this courseyou should beableto:
1 Identify different derivative products that are available in the financial market
2 swdprstand the operation of derivatives markets(options,futures,forwards and
3 sMaseteor-hefurtdtecnentguesoncepts in pricing derivativeinstruments using various
4 Pamketstskte how a range of derivative products can be used to hedge and speculate
5 Work collaboratively in a team to collect and analyse financial/derivative data, and price/evaluate different finacial derivatives.
3.Learning Resources
3.1 Required Resources
Lecture notes and other relevantsupporting materials thatcan be downloaded fromBlackboard.
Hull (2022).Options,futures,and other derivatives (Eleventh edition.;Global edition.).Pearson Education Limited.
http://www.pearson.com/store/p/options-futures-and-other-derivatives-global-edition/P200000004519/9781292410654 (http//www.pearson.com/store/p/options-futures-and-other-derivatives-global-edition/P200000004519/9781292410654)
3.2 Recommended Resources
Hull,Treepongkaruna,S,Heaney,R,Pitt,D,&Colwell,D.(2014).Fundamentals offutures and options markets.Pearson Australia a division of Pearson Australia Group Pty Ltd.
Comments:This is a simplifed textbook of the classic John Hulltextbookon"Options,futures and other derivatives",with a focus on the Australasian market.
http://www.pearson.com/store/p/fundamentals-of-futures-and-options-markets-australian-edition/P200000008165/9781486013685 (http://www.pearson.com/store/p/fundamentals-of-futures-and-options-markets-australian-edition/P20000008165/9781486013685)
3.3 University Learning Resources
Access to required and recommended resources,plus past central exam papers,is available at the UQ Library website (http://www.library.uq.edu.au/lr/FINM3405(http://www.library.uq.edu.au/lr/FINM3405)).
The University offers a range of resources and services to support student learning.Details areavailable on the myUQ website (htps:/my.uq.edu.au
(https://student.my.uq.edu.au/).
3.4 School of Business Learning Resources
Notapplicable.
3.5 Other Learning Resources &Information
Learn (Blackboard)
Al courses are supported by the UQ Learning Management System,Blackboard Learn,which provides an interactive environment for the students
and teachers.This is accessible via PC or Macor Mobile(Apps)environment Tolog on to Blackboard,goto https:/learn.uq.edu.au.(https://learn.uq.edu.au)
·As Blackboardisa web-based application,youwilleed a recenty-released browser for your computer.For thelatestRelease Notes for Bb
Student, see http://en-gb.help.blackboard.com/Bb_Student/z_Release_Notes_Bb_Student (http://en- gb.help.blackboard.com/Bb_Student/z_Release_Notes_Bb_Student)
·Forhelp with Learn.UQ(Blackboard),see https:/web.library.ug.edu.au/ibrary-services/it/learnuq-blackboard-helplearnuq-blackboard contacts(https:/weblibrary.uq.edu.au/ibrary-services/it/learnuq-blackboard-help/learnuq-blackboard-contacts)or contact AskUs
https://web.library.uq.edu.au/contact-us(https://web.library.uq.edu.au/contact-us) or telephone 33464312.