Financial Risk Management
Duration
- One Semester or equivalentThis unit will be delivered on-line in Semester 2 2020.
Contact hours
- 36 contact hours
2020 teaching periods
Hawthorn
| Higher Ed. Semester 2 | HOL Study Period 3 | |
|---|---|---|
Dates: Results: Last self enrolment: Census: |
Dates: Results: Last self enrolment: Census: |
Swinburne Online
| Teaching Period 3 | ||
|---|---|---|
Dates: Results: Last self enrolment: Census: |
Prerequisites
FIN20014 Financial ManagementCorequisites
NilAims and objectives
This unit enables students to analyse the sources of financial risk as well as the importance of implementing hedging procedures in order to mitigate risk. The unit is designed to equip students with quantitative skills and understanding of a variety of derivative instruments that can be used for hedging purposes, while broadening their knowledge of managing risk within an ethical framework. The increasing instability of global financial markets and ethical scandals underscores the importance of this unit, whereby it has become a basic best practice in order to mitigate unforeseen losses. Students will also learn to how to mitigate financial risks using a variety of financial derivatives.
Students who successfully complete this unit will be able to:
1 Analyse the sources of financial risk and the importance of implementing effective financial risk management procedures in business entities
2 Apply the understanding of a variety of derivative instruments in hedging and trading strategies and how these instruments are priced.
3 Evaluate hedging strategies and their outcomes using derivative instruments, to hedge financial risks in a variety of assets
4 Evaluate the need for sound financial risk management policies and procedures in organisations within an ethical framework.
Unit information in detail
- Teaching methods, assessment, general skills outcomes and content.
Teaching methods
Face to Face Mode:
Scheduled hours: Lectures (12 x 1 hour), Tutorials (12 x 2 hours)
Online Mode: OUA
Engaging with online content and discussions
Student workload:
For all teaching and learning structures (both face to face and online), students are expected to spend an average of 150 hours per unit in total over the duration of the study period
This includes all:
• Scheduled teaching and learning events and activities (contact hours timetabled in a face-to-face teaching space) and scheduled online learning events (contact hours scheduled in an online teaching space), and
To be successful, students should:
• Read all prescribed materials and/or view videos in preparation for each class
• Attend and engage in all scheduled classes (face to face or online)
• Start assessment tasks well ahead of the due date, and submit assessments promptly
• Read / listen to all feedback carefully, and consider it for future assessment
• Engage with fellow students and teaching staff (don’t hesitate to ask questions)
Scheduled hours: Lectures (12 x 1 hour), Tutorials (12 x 2 hours)
Online Mode: OUA
Engaging with online content and discussions
Student workload:
For all teaching and learning structures (both face to face and online), students are expected to spend an average of 150 hours per unit in total over the duration of the study period
This includes all:
• Scheduled teaching and learning events and activities (contact hours timetabled in a face-to-face teaching space) and scheduled online learning events (contact hours scheduled in an online teaching space), and
• Non-scheduled learning events and activities (including directed online learning activities, assessments, independent study, student group meetings, and research)
• Read all prescribed materials and/or view videos in preparation for each class
• Attend and engage in all scheduled classes (face to face or online)
• Start assessment tasks well ahead of the due date, and submit assessments promptly
• Read / listen to all feedback carefully, and consider it for future assessment
• Engage with fellow students and teaching staff (don’t hesitate to ask questions)
Assessment
1. Assignment (Group) 20-30%
2. Online Assessments (Individual) 20– 30%
3. Final Exam (Individual) 40-60%
2. Online Assessments (Individual) 20– 30%
3. Final Exam (Individual) 40-60%
General skills outcomes
During this unit students will receive feedback on the following key generic skills:
• Problem solving skills
• Analysis skills
• Ability to tackle unfamiliar problems, and
• Ability to work independently
Content
• Futures and forwards – pricing, valuation and their use in hedging financial risk
• Options – option types, option payoffs, principles of option pricing, option strategies, hedging with options
• Interest rate and foreign currency swaps.
• Interest rate derivatives, using interest rate caps and collars for hedging
• Credit derivatives – credit default swaps (CDS); collateralised debt obligations (CDO)
• Financial risk management policies and procedures, ethics and governance
Study resources
- Reading materials.
Reading materials
Students are advised to check the unit outline in the relevant teaching period for appropriate textbooks and further reading.