Financial Risk Management
Overview
This unit introduces students to key sources of financial risk and how these risks can be managed responsibly using derivative instruments. Students learn how futures, forwards, options, swaps, and credit derivatives are used to hedge interest rate, currency, and market risks. Through hands-on simulated trading activities, students develop digital literacies by analysing real market data, using financial analytics tools, and testing hedging strategies in a risk-free environment. The unit emphasises ethical decision-making and ESG considerations, enabling students to understand how effective, risk management supports sustainability, responsible investment practices, and long-term financial stability in contemporary global financial markets.
Requisites
08-February-2026
31-May-2026
01-November-2026
07-February-2027
Unit learning outcomes
Students who successfully complete this unit will be able to:
- Analyse key sources of financial risk faced by business entities and the role of financial risk management in promoting financial stability and sustainability.
- Apply a variety of derivative instruments, to price contracts and design hedging and trading strategies for interest rate, currency, and market risks.
- Evaluate the effectiveness of hedging strategies using derivative instruments, leveraging technology, simulated trading platforms, and real market data to analyse outcomes and support evidence-based decision-making.
- Critically evaluate organisational financial risk management policies and practices, with reference to sustainability objectives, ESG considerations, and ethical responsibilities.
- Collaborate to apply research and analytical skills to financial risk management problems and communicate findings effectively in a group context.
Teaching methods
Swinburne Online
| Type | Hours per week | Number of weeks | Total (number of hours) |
|---|---|---|---|
| Online Directed Online Learning and Independent Learning | 12.50 | 12 weeks | 150 |
| TOTAL | 150 |
Hawthorn
| Type | Hours per week | Number of weeks | Total (number of hours) |
|---|---|---|---|
| On-campus Class |
2.00 | 12 weeks | 24 |
| Online Lecture (asynchronous) |
1.00 | 12 weeks | 12 |
| Unspecified Activities Independent Learning |
9.50 | 12 weeks | 114 |
| TOTAL | 150 |
Assessment
| Type | Task | Weighting | ULO's |
|---|---|---|---|
| Assessment | Individual | 40 - 60% | 1,2,3,4 |
| Assessment | Individual | 20 - 30% | 1,2,3 |
| Assignment | Group | 20 - 30% | 1,3,5 |
Content
- Introduction to financial risk management and key sources of financial risk
- Hedging with futures and forwards
- Pricing and valuation of futures and forwards
- Interest rate futures and forwards
- Options: characteristics, markets, and pricing
- Option trading and hedging strategies
- Hedging with interest rate and currency swaps
- Credit derivatives: credit default swaps (CDS) and collateralised debt obligations (CDOs) for hedging and trading
- Sustainability, and ESG considerations in financial risk management
Study resources
Reading materials
A list of reading materials and/or required textbooks will be available in the Unit Outline on Canvas.