Undergraduate - UnitAFC3340 - Options, financial futures and other derivatives

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

Synopsis

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.

Outcomes

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.

Assessment

Within semester assessment: 20%
Examination (3 hours): 80%

Chief examiner(s)

Binh Do

Contact hours

3 hours per week

Prerequisites

AFC2140

Prohibitions

AFF3751