Derivatives and Specialized Products

Curriculum Guideline

Effective Date:
Course
Discontinued
No
Course Code
FINC 4450
Descriptive
Derivatives and Specialized Products
Department
Finance
Faculty
Commerce & Business Administration
Credits
3.00
Start Date
End Term
Not Specified
PLAR
No
Semester Length
15 Weeks X 4 Hours per Week = 60 Hours
Max Class Size
35
Contact Hours
Lecture: 4 Hours Total: 4 Hours
Method Of Instruction
Lecture
Seminar
Methods Of Instruction

Material will be presented within a lecture format.

Course Description
Derivatives and specialized products is a course which will examine topics dealing with derivative securities. Derivative securities are often utilized in the management of interest rate, exchange rate, commodity and equity price risks. Derivative securities also provide a vehicle for investors to speculate. The types of derivative securities, their use in modern finance, and methods for pricing them will be the subject matter for this course.
Course Content
  1. Discussion of risk
  2. Mechanics and pricing of forwards and futures
  3. Interest rate futures
  4. Swaps
  5. Options markets
  6. Properties of stock options
  7. Trading strategies involving options
  8. Option pricing: the binomial model
  9. Option pricing: the Black-Scholes model
  10. Options on stock indices, currencies, and futures
Learning Outcomes

At the end of the course, the successful student should be able to:

 

  1. analyze and understand the meaning of risk;
  2. utilize derivative securities for the purpose of managing risk;
  3. determine the value of different derivative securities;
  4. analyze the mechanics of futures and options trading.
Means of Assessment

Minimum of 3 evaluations, none of which will exceed 40%, for a total of 100%.

Students may conduct research as part of their coursework in this class. Instructors for the course are responsible for ensuring that student research projects comply with College policies on ethical conduct for research involving humans, which can require obtaining Informed Consent from participants and getting the approval of the Douglas College Research Ethics Board prior to conducting the research.

Textbook Materials

Textbooks and Materials to be Purchased by Students

 

  • Hull, J.  Fundamentals of Futures and Options Markets, Latest Ed. Toronto: Prentice Hall Canada.  (required)

 

  • Ritchken, P.   Derivative Markets: Theory, Strategy, and Applications, Latest Ed.  HarperCollins Publishers Ltd.  (optional)
Prerequisites
Corequisites
Equivalencies

Courses listed here are equivalent to this course and cannot be taken for further credit:

  • No equivalency courses