Reference no: EM131450380

Email Etiquette: Consultation with your subject coordinator and/or teachers via email

Your teachers receive many emails each day. In order to enable them to respond to your emails appropriately and in a timely fashion, students are asked to observe basic requirements of professional communication:

Consider what the communication is about

- Is your question addressed elsewhere (e.g. in this subject outline or, where applicable, on the subject's eLearning site)?
- Is it something that is better discussed in person or by telephone? This may be the case if your query requires a lengthy response or a dialogue in order to address. If so, see consultation times above and/or schedule an appointment.
- Are you addressing your request to the most appropriate person?

Specific email title/header to enable easy identification of subject related/student emails

- Identify the subject code of the subject you are enquiring about (as your teacher may be involved in more than one subject) in the email header. Add a brief, specific header after the subject code where appropriate.

Professional courtesy

- Address your teacher appropriately by name (and formal title if you do not yet know them).
- Use full words (avoid 'text-speak' abbreviations), correct grammar and correct spelling.
- Be respectful and courteous.
- Academics will normally respond within 1-2 business days. If the matter is urgent, you may wish to telephone the teaching staff whose contact details are given in this subject outline or contact the School.
- Please ensure that you include your full name and identify your seminar or tutorial group in your email so that your teachers know who they are communicating with and can follow-up personally where appropriate.

SECTION A: GENERAL INFORMATION

SUBJECT DESCRIPTION

This subject will expose students to the main types of financial derivatives, such as options, futures, swaps and synthetic derivatives. It will explore the principles and practical use of derivatives, conceptual and analytical aspects of derivatives, their main characteristics and the most dangerous pitfalls in using them. This subject will also undertake an advanced analysis of investment theory with an emphasis on the integration of derivative use and strategies with other portfolio management skills. Individual topics include; binomial decision theory, trading strategies using complex derivative structures, interest rate futures and swaps, the Greeks, futures options, value at risk, credit derivatives, weather, energy, and insurance derivatives, securitisation and the credit crisis, and the way commodity prices are modelled and commodity derivatives are valued.

STUDENT LEARNING OUTCOMES
On successful completion of this subject, students will be able to:

1. Develop comprehensive theoretical, industrial and technical knowledge of financial derivatives offered in global markets such as options, futures, forwards, swaps etc.
2. Analyse various market developments and issues relating to derivatives and their utilization.
3. Examine the effect of regulatory issues and markets development on the utilisation of derivatives.
4. Apply the knowledge on derivatives in the management of strategic risk, financial risk for investors and institutions.
5. Use derivatives to hedge and manage transaction and financial exposures.

Assessment - Essay

Authentic Task - Individual Assignment

The aim of the essay is to assess students active learning by asking them to build a leveraged portfolio using derivatives. A market quoted stock will be assigned to each student who has to monitor the actual price trend during the time the subject is running. At the same time the student has to build two different scenarios based on bad and booming trends for the assigned stock. Following a Montecarlo simulation, the student has to apply hedging strategies on a marking-to-market basis to minimise losses and/or maximise profits. At the established expiration, the student has to report the theoretical and actual value of its portfolio, as well as alpha, beta, delta and vega of the portfolio with the relative leverage level.

https://www.dropbox.com/s/28op0b83nakuzc9/Wollongong.zip?dl=0