Module ASB-3529:
Financial Derivatives

Overview

Topics may include but not be limited to: Introduction to financial derivatives, forwards, futures, option strategies, option pricing (binomial model and Black-Scholes), option Greeks, and Swaps.

Topics may include but not be limited to: Introduction to financial derivatives, option strategies, option pricing (binomial model and Black-Scholes), option Greeks, and Swaps.

Assessment Strategy

-threshold -D- to D+ (40-49%): No major omissions or inaccuracies in the deployment of information/skills. Some grasp of theoretical/conceptual/practical elements. Integration of theory/practice/information present intermittently in pursuit of the assessed work's objectives.

-good -B- to B+ (60-69%): Very good performance Most of the relevant information accurately deployed. Good grasp of theoretical/conceptual/practical elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Evidence of the use of creative and reflective skills.

-excellent -A- to A+ (70%+): Outstanding Performance. The relevant information accurately deployed. Excellent grasp of theoretical/conceptual/practice elements. Good integration of theory/practice/information in pursuit of the assessed work's objectives. Strong evidence of the use of creative and reflective skills.

-another level-C- to C+ (50-59%): Much of the relevant information and skills mostly accurately deployed. Adequate grasp of theoretical/conceptual/practical elements. Fair integration of theory/practice/information in the pursuit of the assessed work's objectives. Some evidence of the use of creative and reflective skills.

Learning Outcomes

• Critically appraise how options are priced with the Black-Scholes and Binomial option pricing models

• Critically appraise how options can be priced using the binomial model

• Critically appraise the role of swaps in managing interest rate risks

• Evaluate the role the parameters that affect the price and risks associated with options

• Perform a detailed assessment of how to create hedging and speculating strategies using forwards and option strategies