UWA Handbook 2017

Unit details

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 and tests; (2) final examination; and (3) presentation. Further information is available in the unit outline.

Supplementary assessment is not available in this unit.
Unit Coordinator(s) Dr Andrew Caminschi
Unit rules
Prerequisites: FINA5432 Introduction to Finance
Incompatibility: FINA2204 Derivative Products and Markets and FINA3306 Derivative Strategies and Pricing
Contact hours lectures/seminars/workshops: up to 3 hours per week
Unit OutlineSemester 1 : http://www.unitoutlines.biz.uwa.edu.au/Units/FINA5520/SEM-1/2017
Semester 2 : http://www.unitoutlines.biz.uwa.edu.au/Units/FINA5520/SEM-2/2017

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