EFB344 Risk Management and Derivatives
To view more information for this unit, select Unit Outline from the list below. Please note the teaching period for which the Unit Outline is relevant.
| Unit code: | EFB344 |
|---|---|
| Prerequisite(s): | EFB201 and EFB210 |
| Equivalent(s): | EFX344 |
| Credit points: | 12 |
| Timetable | Details in HiQ, if available |
| Availabilities |
|
| CSP student contribution | $2,040 |
| Pre-2021 CSP student contribution | $1,597 The pre-2021 commonwealth supported place (CSP) contribution amount only applies to students enrolled in a course prior to 2021. To learn more, visit our Understanding your fees page. |
| Domestic tuition unit fee | $3,024 |
| International unit fee | $4,176 |
Unit Outline: Semester 1 2024, Gardens Point, Internal
| Unit code: | EFB344 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFB201 and EFB210 |
| Equivalent: | EFX344 |
| Coordinator: | Marco Elia | marco.elia@qut.edu.au |
Overview
This unit develops knowledge and skills required to identify, measure and hedge the risks associated with an exposure to financial securities. Building on earlier finance units, and with a focus on the risk associated with movements in market prices (market risk), this unit introduces students to specialised knowledge and skills for identifying, measuring, managing and hedging risk. As derivative securities are an important tool in risk management, this unit explores a wide range of derivative securities and examines their pricing and use in managing and hedging risk. Subsequent topics on derivatives include the pricing and use of forwards, futures, swaps and options contracts. Students will develop their self-reflection skills in considering their application of financial knowledge and reasoning, and in exercising responsibility and accountability for their own learning: valuable skills for finance professionals.
Learning Outcomes
On successful completion of this unit you will be able to:
- Demonstrate and apply knowledge of financial derivatives, markets, and pricing methodologies and evaluate their use in risk management.
- Demonstrate, analyse and apply knowledge of risk management measures and practices.
- Apply knowledge, judgement, technical and technological skills to solve problems related to the risk management of diverse portfolios.
- Demonstrate the ability to exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.Relates to: UG Business Capabilities: TS (4.1)
Content
Initial topics in this unit relate to the practice of risk management, categories of risk, the value of risk management and metrics employed to measure market risk. Subsequent topics focus on developing students' knowledge of forwards, futures, swaps and options by examining their pricing and use for managing and hedging risk.
QUT Business Capabilities (Undergraduate)
The content and assessment in this unit are aligned to a selection of the following set of QUT Business Capabilities, also known as Assurance of Learning Goals (AoLs). Developing these capabilities will assist you to meet the desired graduate outcomes set at QUT and equip you with the knowledge and skills to succeed in your chosen career.
Knowledge and Technological Skills (KS)
1.1 Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
1.2 Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Higher Order Thinking (HO)
2.1 Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
2.2 Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Professional Communication (PC)
3.1 Use information literacy skills, and communicate effectively and professionally in written forms and using media appropriate for diverse purposes and contexts.
3.2 Use information literacy skills, and communicate effectively and professionally in oral forms, appropriate for diverse purposes and contexts.
Teamwork and Self (TS)
4.1 Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
4.2 Apply teamwork knowledge and skills for effective collaboration across diverse purposes and contexts.
Social, Ethical and Global Understanding (SE)
5.1 Demonstrate and apply knowledge of ethical and legal principles and practices in analysing and responding to business issues.
5.2 Demonstrate and apply knowledge of socially responsible behaviour in analysing and addressing business issues in national and international business contexts.
Learning Approaches
This unit consists of a weekly two hour lecture and one hour tutorial, with tutorials providing the opportunity to discuss and apply the materials presented in the lectures. The quantitative focus of the unit (measuring risk and pricing derivatives) means that regular attendance at lectures and tutorials is essential to successfully completing the unit. The unit is taught with actual financial securities and data with a focus on contemporaneous market and economic conditions. The tutorial work and assessment items provide an opportunity to apply the knowledge and skills you develop in this unit to a range of financial exposures and securities. Tasks within the project will require students to apply their knowledge and skills to analyse and solve complex problems with the aid of current technologies. In doing so, it is envisaged that this assessment item will further develop an in-depth understanding of risk management and derivatives.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
The assessment in this unit aims to support your achievement of the unit learning outcomes and course assurance of learning goals. The assessment has been designed in order to allow you to:
- receive feedback on your learning as you progress toward the development of knowledge, understanding, skills and attitudes (formative assessment);
- demonstrate your learning in order to achieve a final grade (summative assessment).
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Project
Part A of the project requires students to apply and analyse measures of risk in the context of financial exposures and to respond to related questions on the practice of risk measurement. Students are then required to select appropriate derivative securities to manage this risk. The task requires students to price a variety of derivative securities and to evaluate the ability of these securities to manage the risks identified in the earlier analysis.
Part B requires students to submit a reflective piece that considers their application of financial knowledge and financial reasoning skills and the demonstration of responsibility and accountability for their learning.
This is an assignment for the purposes of an extension.
Formative or Summative: Formative and Summative
Weight: 40% (30% for Part A, 10% for Part B)
Business Capabilities (AoL goals): KS (1.1, 1.2), HO (2.2), TS (4.1)
Assessment: Mid-semester exam
Short-answer exam covering Topics 1 to 4.
Formative or Summative: Formative and Summative
Business Capabilities (AoL goals): KS (1.1)
Assessment: Final Exam
Short Answer exam covering Topics 5 to 12.
Formative or Summative: Summative
Business Capabilities (AoL goals): KS (1.1), HO (2.1, 2.2)
Academic Integrity
Students are expected to engage in learning and assessment at QUT with honesty, transparency and fairness. Maintaining academic integrity means upholding these principles and demonstrating valuable professional capabilities based on ethical foundations.
Failure to maintain academic integrity can take many forms. It includes cheating in examinations, plagiarism, self-plagiarism, collusion, and submitting an assessment item completed by another person (e.g. contract cheating). It can also include providing your assessment to another entity, such as to a person or website.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Further details of QUT’s approach to academic integrity are outlined in the Academic integrity policy and the Student Code of Conduct. Breaching QUT’s Academic integrity policy is regarded as student misconduct and can lead to the imposition of penalties ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Recommended text(s)
Hull, J., Treepongkaruna, S., Heaney, R., Pitt, D. and Colwell, D. (2014), Fundamentals of Futures and Options Markets. Pearson: Frenchs Forest, New South Wales, Australia.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit.
You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Undergraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO3, Project, Final Exam
KS (1.1): Discipline Knowledge
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam
KS (1.2): Technical and Technological Skills
TS (4.1): Self-Reflection and Accountability
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS05 Bachelor of Business
- Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam - Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Relates to: ULO3, Project - Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
Relates to: ULO1, ULO2, Final Exam - Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Relates to: ULO3, Project, Final Exam - Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
Relates to: ULO4, Project
Unit Outline: Semester 1 2024, Online
| Unit code: | EFB344 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFB201 and EFB210 |
| Equivalent: | EFX344 |
Overview
This unit develops knowledge and skills required to identify, measure and hedge the risks associated with an exposure to financial securities. Building on earlier finance units, and with a focus on the risk associated with movements in market prices (market risk), this unit introduces students to specialised knowledge and skills for identifying, measuring, managing and hedging risk. As derivative securities are an important tool in risk management, this unit explores a wide range of derivative securities and examines their pricing and use in managing and hedging risk. Subsequent topics on derivatives include the pricing and use of forwards, futures, swaps and options contracts. Students will develop their self-reflection skills in considering their application of financial knowledge and reasoning, and in exercising responsibility and accountability for their own learning: valuable skills for finance professionals.
Learning Outcomes
On successful completion of this unit you will be able to:
- Demonstrate and apply knowledge of financial derivatives, markets, and pricing methodologies and evaluate their use in risk management.
- Demonstrate, analyse and apply knowledge of risk management measures and practices.
- Apply knowledge, judgement, technical and technological skills to solve problems related to the risk management of diverse portfolios.
- Demonstrate the ability to exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.Relates to: UG Business Capabilities: TS (4.1)
Content
Initial topics in this unit relate to the practice of risk management, categories of risk, the value of risk management and metrics employed to measure market risk. Subsequent topics focus on developing students' knowledge of forwards, futures, swaps and options by examining their pricing and use for managing and hedging risk.
QUT Business Capabilities (Undergraduate)
The content and assessment in this unit are aligned to a selection of the following set of QUT Business Capabilities, also known as Assurance of Learning Goals (AoLs). Developing these capabilities will assist you to meet the desired graduate outcomes set at QUT and equip you with the knowledge and skills to succeed in your chosen career.
Knowledge and Technological Skills (KS)
1.1 Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
1.2 Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Higher Order Thinking (HO)
2.1 Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
2.2 Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Professional Communication (PC)
3.1 Use information literacy skills, and communicate effectively and professionally in written forms and using media appropriate for diverse purposes and contexts.
3.2 Use information literacy skills, and communicate effectively and professionally in oral forms, appropriate for diverse purposes and contexts.
Teamwork and Self (TS)
4.1 Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
4.2 Apply teamwork knowledge and skills for effective collaboration across diverse purposes and contexts.
Social, Ethical and Global Understanding (SE)
5.1 Demonstrate and apply knowledge of ethical and legal principles and practices in analysing and responding to business issues.
5.2 Demonstrate and apply knowledge of socially responsible behaviour in analysing and addressing business issues in national and international business contexts.
Learning Approaches
This unit consists of a weekly two hour lecture and one hour tutorial, with tutorials providing the opportunity to discuss and apply the materials presented in the lectures. The quantitative focus of the unit (measuring risk and pricing derivatives) means that regular attendance at lectures and tutorials is essential to successfully completing the unit. The unit is taught with actual financial securities and data with a focus on contemporaneous market and economic conditions. The tutorial work and assessment items provide an opportunity to apply the knowledge and skills you develop in this unit to a range of financial exposures and securities. Tasks within the project will require students to apply their knowledge and skills to analyse and solve complex problems with the aid of current technologies. In doing so, it is envisaged that this assessment item will further develop an in-depth understanding of risk management and derivatives.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
The assessment in this unit aims to support your achievement of the unit learning outcomes and course assurance of learning goals. The assessment has been designed in order to allow you to:
- receive feedback on your learning as you progress toward the development of knowledge, understanding, skills and attitudes (formative assessment);
- demonstrate your learning in order to achieve a final grade (summative assessment).
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Project
Part A of the project requires students to apply and analyse measures of risk in the context of financial exposures and to respond to related questions on the practice of risk measurement. Students are then required to select appropriate derivative securities to manage this risk. The task requires students to price a variety of derivative securities and to evaluate the ability of these securities to manage the risks identified in the earlier analysis.
Part B requires students to submit a reflective piece that considers their application of financial knowledge and financial reasoning skills and the demonstration of responsibility and accountability for their learning.
This is an assignment for the purposes of an extension.
Formative or Summative: Formative and Summative
Weight: 40% (30% for Part A, 10% for Part B)
Business Capabilities (AoL goals): KS (1.1, 1.2), HO (2.2), TS (4.1)
Assessment: Mid-semester exam
Short-answer exam covering Topics 1 to 4.
Formative or Summative: Formative and Summative
Business Capabilities (AoL goals): KS (1.1)
Assessment: Final Exam
Short Answer exam covering Topics 5 to 12.
Formative or Summative: Summative
Business Capabilities (AoL goals): KS (1.1), HO (2.1, 2.2)
Academic Integrity
Students are expected to engage in learning and assessment at QUT with honesty, transparency and fairness. Maintaining academic integrity means upholding these principles and demonstrating valuable professional capabilities based on ethical foundations.
Failure to maintain academic integrity can take many forms. It includes cheating in examinations, plagiarism, self-plagiarism, collusion, and submitting an assessment item completed by another person (e.g. contract cheating). It can also include providing your assessment to another entity, such as to a person or website.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Further details of QUT’s approach to academic integrity are outlined in the Academic integrity policy and the Student Code of Conduct. Breaching QUT’s Academic integrity policy is regarded as student misconduct and can lead to the imposition of penalties ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Recommended text(s)
Hull, J., Treepongkaruna, S., Heaney, R., Pitt, D. and Colwell, D. (2014), Fundamentals of Futures and Options Markets. Pearson: Frenchs Forest, New South Wales, Australia.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit.
You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Undergraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO3, Project, Final Exam
KS (1.1): Discipline Knowledge
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam
KS (1.2): Technical and Technological Skills
TS (4.1): Self-Reflection and Accountability
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS05 Bachelor of Business
- Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam - Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Relates to: ULO3, Project - Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
Relates to: ULO1, ULO2, Final Exam - Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Relates to: ULO3, Project, Final Exam - Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
Relates to: ULO4, Project
Unit Outline: Semester 2 2024, Gardens Point, Internal
| Unit code: | EFB344 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFB201 and EFB210 |
| Equivalent: | EFX344 |
| Coordinator: | Marco Elia | marco.elia@qut.edu.au |
Overview
This unit develops knowledge and skills required to identify, measure and hedge the risks associated with an exposure to financial securities. Building on earlier finance units, and with a focus on the risk associated with movements in market prices (market risk), this unit introduces students to specialised knowledge and skills for identifying, measuring, managing and hedging risk. As derivative securities are an important tool in risk management, this unit explores a wide range of derivative securities and examines their pricing and use in managing and hedging risk. Subsequent topics on derivatives include the pricing and use of forwards, futures, swaps and options contracts. Students will develop their self-reflection skills in considering their application of financial knowledge and reasoning, and in exercising responsibility and accountability for their own learning: valuable skills for finance professionals.
Learning Outcomes
On successful completion of this unit you will be able to:
- Demonstrate and apply knowledge of financial derivatives, markets, and pricing methodologies and evaluate their use in risk management.
- Demonstrate, analyse and apply knowledge of risk management measures and practices.
- Apply knowledge, judgement, technical and technological skills to solve problems related to the risk management of diverse portfolios.
- Demonstrate the ability to exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.Relates to: UG Business Capabilities: TS (4.1)
Content
Initial topics in this unit relate to the practice of risk management, categories of risk, the value of risk management and metrics employed to measure market risk. Subsequent topics focus on developing students' knowledge of forwards, futures, swaps and options by examining their pricing and use for managing and hedging risk.
QUT Business Capabilities (Undergraduate)
The content and assessment in this unit are aligned to a selection of the following set of QUT Business Capabilities, also known as Assurance of Learning Goals (AoLs). Developing these capabilities will assist you to meet the desired graduate outcomes set at QUT and equip you with the knowledge and skills to succeed in your chosen career.
Knowledge and Technological Skills (KS)
1.1 Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
1.2 Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Higher Order Thinking (HO)
2.1 Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
2.2 Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Professional Communication (PC)
3.1 Use information literacy skills, and communicate effectively and professionally in written forms and using media appropriate for diverse purposes and contexts.
3.2 Use information literacy skills, and communicate effectively and professionally in oral forms, appropriate for diverse purposes and contexts.
Teamwork and Self (TS)
4.1 Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
4.2 Apply teamwork knowledge and skills for effective collaboration across diverse purposes and contexts.
Social, Ethical and Global Understanding (SE)
5.1 Demonstrate and apply knowledge of ethical and legal principles and practices in analysing and responding to business issues.
5.2 Demonstrate and apply knowledge of socially responsible behaviour in analysing and addressing business issues in national and international business contexts.
Learning Approaches
This unit consists of a weekly two hour lecture and one hour tutorial, with tutorials providing the opportunity to discuss and apply the materials presented in the lectures. The quantitative focus of the unit (measuring risk and pricing derivatives) means that regular attendance at lectures and tutorials is essential to successfully completing the unit. The unit is taught with actual financial securities and data with a focus on contemporaneous market and economic conditions. The tutorial work and assessment items provide an opportunity to apply the knowledge and skills you develop in this unit to a range of financial exposures and securities. Tasks within the project will require students to apply their knowledge and skills to analyse and solve complex problems with the aid of current technologies. In doing so, it is envisaged that this assessment item will further develop an in-depth understanding of risk management and derivatives.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
The assessment in this unit aims to support your achievement of the unit learning outcomes and course assurance of learning goals. The assessment has been designed in order to allow you to:
- receive feedback on your learning as you progress toward the development of knowledge, understanding, skills and attitudes (formative assessment);
- demonstrate your learning in order to achieve a final grade (summative assessment).
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Project
Part A of the project requires students to apply and analyse measures of risk in the context of financial exposures and to respond to related questions on the practice of risk measurement. Students are then required to select appropriate derivative securities to manage this risk. The task requires students to price a variety of derivative securities and to evaluate the ability of these securities to manage the risks identified in the earlier analysis.
Part B requires students to submit a reflective piece that considers their application of financial knowledge and financial reasoning skills and the demonstration of responsibility and accountability for their learning.
This is an assignment for the purposes of an extension.
Formative or Summative: Formative and Summative
Weight: 40% (30% for Part A, 10% for Part B)
Business Capabilities (AoL goals): KS (1.1, 1.2), HO (2.2), TS (4.1)
Assessment: Mid-semester exam
Short-answer exam covering Topics 1 to 4.
Formative or Summative: Formative and Summative
Business Capabilities (AoL goals): KS (1.1)
Assessment: Final Exam
Short Answer exam covering Topics 5 to 12.
Formative or Summative: Summative
Business Capabilities (AoL goals): KS (1.1), HO (2.1, 2.2)
Academic Integrity
Students are expected to engage in learning and assessment at QUT with honesty, transparency and fairness. Maintaining academic integrity means upholding these principles and demonstrating valuable professional capabilities based on ethical foundations.
Failure to maintain academic integrity can take many forms. It includes cheating in examinations, plagiarism, self-plagiarism, collusion, and submitting an assessment item completed by another person (e.g. contract cheating). It can also include providing your assessment to another entity, such as to a person or website.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Further details of QUT’s approach to academic integrity are outlined in the Academic integrity policy and the Student Code of Conduct. Breaching QUT’s Academic integrity policy is regarded as student misconduct and can lead to the imposition of penalties ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Recommended text(s)
Hull, J., Treepongkaruna, S., Heaney, R., Pitt, D. and Colwell, D. (2014), Fundamentals of Futures and Options Markets. Pearson: Frenchs Forest, New South Wales, Australia.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit.
You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Undergraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO3, Project, Final Exam
KS (1.1): Discipline Knowledge
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam
KS (1.2): Technical and Technological Skills
TS (4.1): Self-Reflection and Accountability
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS05 Bachelor of Business
- Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam - Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Relates to: ULO3, Project - Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
Relates to: ULO1, ULO2, Final Exam - Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Relates to: ULO3, Project, Final Exam - Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
Relates to: ULO4, Project
Unit Outline: Semester 2 2024, Online
| Unit code: | EFB344 |
|---|---|
| Credit points: | 12 |
| Pre-requisite: | EFB201 and EFB210 |
| Equivalent: | EFX344 |
Overview
This unit develops knowledge and skills required to identify, measure and hedge the risks associated with an exposure to financial securities. Building on earlier finance units, and with a focus on the risk associated with movements in market prices (market risk), this unit introduces students to specialised knowledge and skills for identifying, measuring, managing and hedging risk. As derivative securities are an important tool in risk management, this unit explores a wide range of derivative securities and examines their pricing and use in managing and hedging risk. Subsequent topics on derivatives include the pricing and use of forwards, futures, swaps and options contracts. Students will develop their self-reflection skills in considering their application of financial knowledge and reasoning, and in exercising responsibility and accountability for their own learning: valuable skills for finance professionals.
Learning Outcomes
On successful completion of this unit you will be able to:
- Demonstrate and apply knowledge of financial derivatives, markets, and pricing methodologies and evaluate their use in risk management.
- Demonstrate, analyse and apply knowledge of risk management measures and practices.
- Apply knowledge, judgement, technical and technological skills to solve problems related to the risk management of diverse portfolios.
- Demonstrate the ability to exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.Relates to: UG Business Capabilities: TS (4.1)
Content
Initial topics in this unit relate to the practice of risk management, categories of risk, the value of risk management and metrics employed to measure market risk. Subsequent topics focus on developing students' knowledge of forwards, futures, swaps and options by examining their pricing and use for managing and hedging risk.
QUT Business Capabilities (Undergraduate)
The content and assessment in this unit are aligned to a selection of the following set of QUT Business Capabilities, also known as Assurance of Learning Goals (AoLs). Developing these capabilities will assist you to meet the desired graduate outcomes set at QUT and equip you with the knowledge and skills to succeed in your chosen career.
Knowledge and Technological Skills (KS)
1.1 Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
1.2 Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Higher Order Thinking (HO)
2.1 Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
2.2 Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Professional Communication (PC)
3.1 Use information literacy skills, and communicate effectively and professionally in written forms and using media appropriate for diverse purposes and contexts.
3.2 Use information literacy skills, and communicate effectively and professionally in oral forms, appropriate for diverse purposes and contexts.
Teamwork and Self (TS)
4.1 Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
4.2 Apply teamwork knowledge and skills for effective collaboration across diverse purposes and contexts.
Social, Ethical and Global Understanding (SE)
5.1 Demonstrate and apply knowledge of ethical and legal principles and practices in analysing and responding to business issues.
5.2 Demonstrate and apply knowledge of socially responsible behaviour in analysing and addressing business issues in national and international business contexts.
Learning Approaches
This unit consists of a weekly two hour lecture and one hour tutorial, with tutorials providing the opportunity to discuss and apply the materials presented in the lectures. The quantitative focus of the unit (measuring risk and pricing derivatives) means that regular attendance at lectures and tutorials is essential to successfully completing the unit. The unit is taught with actual financial securities and data with a focus on contemporaneous market and economic conditions. The tutorial work and assessment items provide an opportunity to apply the knowledge and skills you develop in this unit to a range of financial exposures and securities. Tasks within the project will require students to apply their knowledge and skills to analyse and solve complex problems with the aid of current technologies. In doing so, it is envisaged that this assessment item will further develop an in-depth understanding of risk management and derivatives.
COVID-19 restrictions may require changes to the planned Learning Approaches described here. Students should refer to the unit Canvas site for the latest information.
Feedback on Learning and Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment
Overview
The assessment in this unit aims to support your achievement of the unit learning outcomes and course assurance of learning goals. The assessment has been designed in order to allow you to:
- receive feedback on your learning as you progress toward the development of knowledge, understanding, skills and attitudes (formative assessment);
- demonstrate your learning in order to achieve a final grade (summative assessment).
Unit Grading Scheme
7- point scale
Assessment Tasks
Assessment: Project
Part A of the project requires students to apply and analyse measures of risk in the context of financial exposures and to respond to related questions on the practice of risk measurement. Students are then required to select appropriate derivative securities to manage this risk. The task requires students to price a variety of derivative securities and to evaluate the ability of these securities to manage the risks identified in the earlier analysis.
Part B requires students to submit a reflective piece that considers their application of financial knowledge and financial reasoning skills and the demonstration of responsibility and accountability for their learning.
This is an assignment for the purposes of an extension.
Formative or Summative: Formative and Summative
Weight: 40% (30% for Part A, 10% for Part B)
Business Capabilities (AoL goals): KS (1.1, 1.2), HO (2.2), TS (4.1)
Assessment: Mid-semester exam
Short-answer exam covering Topics 1 to 4.
Formative or Summative: Formative and Summative
Business Capabilities (AoL goals): KS (1.1)
Assessment: Final Exam
Short Answer exam covering Topics 5 to 12.
Formative or Summative: Summative
Business Capabilities (AoL goals): KS (1.1), HO (2.1, 2.2)
Academic Integrity
Students are expected to engage in learning and assessment at QUT with honesty, transparency and fairness. Maintaining academic integrity means upholding these principles and demonstrating valuable professional capabilities based on ethical foundations.
Failure to maintain academic integrity can take many forms. It includes cheating in examinations, plagiarism, self-plagiarism, collusion, and submitting an assessment item completed by another person (e.g. contract cheating). It can also include providing your assessment to another entity, such as to a person or website.
You are encouraged to make use of QUT’s learning support services, resources and tools to assure the academic integrity of your assessment. This includes the use of text matching software that may be available to assist with self-assessing your academic integrity as part of the assessment submission process.
Further details of QUT’s approach to academic integrity are outlined in the Academic integrity policy and the Student Code of Conduct. Breaching QUT’s Academic integrity policy is regarded as student misconduct and can lead to the imposition of penalties ranging from a grade reduction to exclusion from QUT.
Resources
Resource Materials
Recommended text(s)
Hull, J., Treepongkaruna, S., Heaney, R., Pitt, D. and Colwell, D. (2014), Fundamentals of Futures and Options Markets. Pearson: Frenchs Forest, New South Wales, Australia.
Risk Assessment Statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit.
You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to view the Emergency video.
Standards/Competencies
This unit is designed to support your development of the following standards\competencies.
QUT Business Capabilities (Undergraduate)
HO (2.1): Critical Analysis
Relates to: ULO1, ULO2, Final Exam
HO (2.2): Independent Judgement and Decision-Making
Relates to: ULO3, Project, Final Exam
KS (1.1): Discipline Knowledge
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam
KS (1.2): Technical and Technological Skills
TS (4.1): Self-Reflection and Accountability
Course Learning Outcomes
This unit is designed to support your development of the following course/study area learning outcomes.BS05 Bachelor of Business
- Demonstrate and apply integrated discipline (including technical) knowledge across the broad field of business with depth in one or more core business disciplines.
Relates to: ULO1, ULO2, Project, Mid-semester exam, Final Exam - Apply technical and technological skills appropriate and effective for real world business purposes and contexts.
Relates to: ULO3, Project - Investigate real world business issues and situations through the effective analysis, evaluation and synthesis of theory and practice.
Relates to: ULO1, ULO2, Final Exam - Exercise independent judgement and initiative in adapting and applying knowledge and skills for effective planning, problem solving and decision making in diverse contexts.
Relates to: ULO3, Project, Final Exam - Exercise self-reflection, responsibility and accountability in relation to own learning and professional practice.
Relates to: ULO4, Project