FINA5520 Risk Management and Financial Instruments

Credit
6 points
Offering
(see Timetable)
AvailabilityLocationMode
Semester 1UWA (Perth)Face to face
Semester 2UWA (Perth)Face to face
Content
This unit provides an in-depth examination of derivative securities and their role in risk management. It covers key derivatives used in practice, the principles of pricing and their applications in the modern financial world. The unit develops the theoretical frameworks, financial, probabilistic and statistical, essential to understanding modern practices in derivative pricing and applications such as portfolio insurance, dynamic hedging and risk management. The Black-Scholes-Merton framework and risk-neutral valuation are explored. The unit also looks at the role derivatives have played in financial crises.
Outcomes
Students are able to (1) demonstrate how to value a variety of simple and complex derivative contracts; (2) critically evaluate and solve sophisticated problems on the pricing, valuation and investment strategies of derivative securities; (3) explain and apply the Black-Scholes-Merton and the Black-Scholes-Merton Greeks models; (4) explain the risks embedded in financial derivatives and how they have contributed to past financial crises; (5) use industry relevant tools (such as spreadsheets and financial information systems) to access, process and calculate derivative prices; and (6) demonstrate the ability to give oral presentations that are clear and coherent to specialists and non-specialists.
Assessment
Typically this unit is assessed in the following ways: (1) assignments; (2) examination; and (3) participation. Further information is available in the unit outline.

Supplementary assessment is not available in this unit.
Unit Coordinator(s)
Assistant Professor Andrew Caminschi
Unit rules
Prerequisites:
for Master of Commerce students: FINA5432 Introduction to Finance
or
equivalent; for Master of Applied Finance students: a finance major
or
FINA5533 Finance Essentials
and
FINA5523 Financial Statement Analysis and Business Valuation
and
FINA5632 Investments
and
FINA5631 International Financial Analysis
Contact hours
lectures/seminars/workshops: up to 3 hours per week
  • The availability of units in Semester 1, 2, etc. was correct at the time of publication but may be subject to change.
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  • Books and other material wherever listed may be subject to change. Book lists relating to 'Preliminary reading', 'Recommended reading' and 'Textbooks' are, in most cases, available at the University Co-operative Bookshop (from early January) and appropriate administrative offices for students to consult. Where texts are listed in the unit description above, an asterisk (*) indicates that the book is available in paperback.