Derivatives – Theory & Applications

Faculty
Child, Family & Community Studies
Department
Disability & Community Studies
Course Code
DACS 2320
Credits
3.00
Semester Length
15
Max Class Size
35
Method Of Instruction
Lecture
Seminar
Typically Offered
To be determined
Campus
Online

Overview

Course Description
This course will examine topics dealing with derivative securities and specialized financial products. The types of derivative securities and specialized financial products, their use in modern finance as tools for hedging, arbitrage and speculation, and methods for pricing them will be the main subject matter for this course.
Course Content

1.   Mechanics of futures and forward markets
2.   Determination of forward and futures prices
3.   Interest rate futures
4.   Hedging strategies using futures
5.   Swaps and Pricing
6.   Mechanics of options markets
7.   Credit derivatives, securitization and the credit crisis of 2007
8.   Properties of stock options
9.   Trading strategies involving options
10. Option pricing: binomial trees
11. Option pricing: Black-Scholes-Merton model
12. Options on stock indices, interest rate and currencies
13. Value at risk, volatility and risk management
14. Derivatives mishaps and lessons learned

Methods Of Instruction

Lectures and seminar discussion

Means of Assessment

Midterm exam                    30%
Case & Project                   15-25%
Assignments                      10-15%

Participation                       0-10%
Final Exam                         35%      
Total                                 100%

Note: students who do not achieve a grade of at least 50% on the combined exam components will fail the course.

Learning Outcomes

At the end of the course, the successful student should be able to:
1.  understand different types of derivative securities and specialized financial products, and derivative markets;
2.  examine and utilize derivative securities as tools for hedging, arbitrage, speculation and risk management;
3.  determine the value of different derivative securities; and
4.  analyze the impact of derivative securities on financial markets and lessons learned from derivatives mishaps.

Textbook Materials

Hull, John C. Fundamentals of Futures and Options Markets, Latest Ed. Prentice Hall Canada (or other textbooks as approved by the Finance Department).

Financial calculator as approved by the department.

Requisites

Prerequisites

FINC 3350 or FINC 3390 or equivalent with a grade of “C” or better

Corequisites

Nil

Equivalencies

Nil

Requisite for

Nil

Course Guidelines

Course Transfers

Institution Transfer Details Effective Dates
Athabasca University (AU) AU FNCE 403 (3) 2016/09/01 to -
Capilano University (CAPU) CAPU BFIN 3XX (3) 2016/09/01 to -
Coast Mountain College (CMTN) No credit 2016/09/01 to -
College of the Rockies (COTR) COTR ACCT 3XX (3) 2016/09/01 to -
Kwantlen Polytechnic University (KPU) No credit 2016/09/01 to -
Simon Fraser University (SFU) SFU BUS 2XX (3) 2016/09/01 to -
University Canada West (UCW) UCW FNCE 4XX (3) 2017/01/01 to -
University Canada West (UCW) No credit 2016/09/01 to 2016/12/31
University of British Columbia - Vancouver (UBCV) UBCV COMM 4th (3), Not for credit in Commerce 2016/09/01 to -
University of Northern BC (UNBC) UNBC COMM 421 (3) 2016/09/01 to -
University of the Fraser Valley (UFV) UFV BUS 434 (3) 2016/09/01 to -
University of Victoria (UVIC) UVIC COM 3XX (1.5) 2016/09/01 to -

Course Offerings

Fall 2020

CRN
Days
Dates
Start Date
End Date
Instructor
Status
Location
35619
Thu
Dong
Zaidong
Open
Online
This course will include synchronous on-line activities. Students should plan to be available on-line at scheduled course times.
Max
Enrolled
Remaining
Waitlist
35
33
0
100
Days
Building
Room
Time
Thu
18:30
-
21:20