Derivatives and Risk Management
|Course code GSBS6142||Units 10||Level 6000||Faculty of Business and LawNewcastle Business School|
A broad range of derivative products is examined with a primary focus on how to use these for the management of financial risks. The course introduces standard models of pricing forward, futures and options on diverse underlying assets. The course then explores hedging methods to conduct risk management for business operations, speculative trades, and issued financial instruments. After completing this course students will be familiar with derivatives valuation and their use in risk management.
Available in 2014
|Objectives||On completion of this course, students will be able to:|
1. Analyse and price diverse derivatives products to generate an optimal risk management strategy.
2. Demonstrate critical thinking, analytical and problem solving skills in the context of derivatives pricing and hedging practice.
3. Explain the binomial model and its extension in continuous time to the Black-Scholes model.
4. Demonstrate an understanding of pricing forwards, futures and options contracts
|Content||The content of this course includes but is not limited to the following topics:|
1. Operation of derivatives market.
2. Risk and return characteristics of derivative securities.
3. Pricing forward and future contracts.
4. Mechanics of option trading.
5. Option pricing with the Binomial and Black-Scholes models.
6. Options on stock indices, futures and exotic options.
7. Managing financial risk using derivative securities.
|Replacing Course(s)||Not applicable.|
|Assumed Knowledge||GSBS6140 Investment Analysis|
|Modes of Delivery||Internal Mode|
|Contact Hours||Lecture: for 3 hour(s) per Week for Full Term|
|Timetables||2014 Course Timetables for GSBS6142|