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Unit of Study FINC2001 - Financial Risk Management (2023)

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Unit Snapshot

  • Enrolment information

    This is an advanced unit. It is highly recommended that students take this unit after having completed an introductory Finance or Economics unit.

Unit description

Introduces students to financial risk management including foreign exchange and interest rates, derivative securities and markets, derivative pricing, and financial risk mitigation strategies. Students will engage in teacher-directed activities and experiences relevant to contemporary financial risk management in the multinational enterprise context.

Unit content

Topic 1: Financial Derivatives: An Introduction

Topic 2: Mechanics of Forwards and Futures

Topic 3: Pricing Forwards and Futures

Topic 4: Strategies using Forwards and Futures

Topic 5: Mechanics of Options

Topic 6: Binomial Option Pricing Model

Topic 7: Black-Scholes-Merton Option Pricing Model

Topic 8: Strategies using Options I

Topic 9: Strategies using Options II

Topic 10: Financial Risk Management: Techniques and Applications

Topic 11: Managing Financial Risk in an Organisation I

Topic 12: Managing Financial Risk in an Organisation II

Availabilities

Location Domestic International
China - TUST
Dual Term4
Dual Term4

Learning outcomes

Unit Learning Outcomes express learning achievement in terms of what a student should know, understand and be able to do on completion of a unit. These outcomes are aligned with the graduate attributes. The unit learning outcomes and graduate attributes are also the basis of evaluating prior learning.

On completion of this unit, students should be able to:

identify and explain the characteristics of financial derivatives

price financial derivatives using appropriate models

execute risk management and trading strategies using financial derivatives

apply an understanding of financial risk management in the international economic environment.

Prescribed learning resources

Prescribed Texts
  • Chance, DM & Brooks, R, 2016, An Introduction to Derivatives and Risk Management, 10th edn, Cengage Learning, Boston, MA, USA. ISBN: ISBN-13: 978-1-305-10496-9.
Prescribed Resources/Equipment

  • Non-programmable financial calculator, which can also be used in the examination. The recommended models are Sharp Business/Financial Calculator EL735S or EL738. Sharp EL733A and EL735 are older models that can also be used in this unit.

Prescribed Learning Resources may change in future Teaching Periods.