Faculty of Business and Economics

Undergraduate - Unit

This unit entry is for students who completed this unit in 2014 only. For students planning to study the unit, please refer to the unit indexes in the the current edition of the Handbook. If you have any queries contact the managing faculty for your course or area of study.

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6 points, SCA Band 2, 0.125 EFTSL

Refer to the specific census and withdrawal dates for the semester(s) in which this unit is offered, or view unit timetables.

FacultyFaculty of Business and Economics
Organisational UnitDepartment of Accounting and Finance
OfferedNot offered in 2014
Coordinator(s)Professor Jonathan Batten


Topics include institutional aspects of how financial derivatives markets operate, use of and factors affecting the price of options in equity, currency and interest rate markets, the pricing of and uses of futures, forward contracts and swaps, new financial derivative instruments in Australia.


The learning goals associated with this unit are to:

  1. describe the characteristics of options, futures, and other derivatives
  2. identify factors that affect option prices
  3. apply option pricing models
  4. explain the operation of futures markets and the link between spot and futures prices
  5. analyse swaps, FRAs, caps, floors and collars in terms of their basic components for pricing purposes
  6. demonstrate how the derivatives can be used for risk management, speculation and arbitrage
  7. apply critical thinking, problem solving and presentation skills to individual and/or group activities dealing with derivative instruments and demonstrate in an individual summative assessment task the acquisition of a comprehensive understanding of the topics covered by AFC3340.


Within semester assessment: 20%
Examination: 80%

Chief examiner(s)

Workload requirements

3 hours per week