FM7102: Financial Derivatives


Please note this module descriptor is indicative of the structure of this course and may be subject to change.

FM7102: Financial Derivatives

Module Title Financial Derivatives
Module Code FM7102
Module Tutor Charles A Afriyie
School Business School
CAT Points 15
Level of Study 7
Brief Description

This module provides advanced analyses of derivative instruments and their usefulness in financial markets to a range of market participants. It provides a critical examination of the seminal models and approaches used in the pricing, valuation and use of derivative instruments including interest rate, equity, and currency forwards, futures, options, swaps and embedded derivatives.

Indicative Syllabus
  1. Derivative markets and instruments
  2. Basics of derivative pricing and valuation
  3. Risk management and applications of options
  4. Forward markets and contracts
  5. Futures markets and contracts
  6. Options markets and contracts
  7. Interest rate derivative instruments
  8. Swap markets and contracts
  9. Credit default swaps
Learning Outcomes

By the end of this module, students should be able to:

1.    Demonstrate an understanding of the uses of financial engineering and risk management approaches and techniques used by modern organisations.

2.    Apply their knowledge of derivatives in solving problems involving financial risks including foreign exchange risk, interest rate risk, credit risk and portfolio risks.

3.    Make informed judgements on the use of derivative instruments.

4.    Identify and assess the impact of seminal developments in the literature on derivatives.

Evaluate, synthesise and communicate the ethical implications of financial risk management policies and practices to an intended audience.

Learning and Teaching Activities Scheduled Contact Hours: 30
Independent Learning Hours: 120
Assessment (For further details see the Module Guide) 001: 40% Coursework: Individual, standard written: 1800 words or equivalent
002: 60% Written Exam: End of module, unseen, closed book: 3.00 hours
Special Assessment Requirements
Indicative Resources The current reading list can be found in the Module Guide, which your lecturer should make available via Moodle.

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