This course aims to provide an introduction into the pricing and use of derivative instruments, portfolios of derivative securities and combinations of derivatives and other financial assets. These are important topics for portfolio managers both in terms of understanding the instruments and correct application of the contracts.

By the end of the course, students are expected to have attained proficiency in the following areas:

• Understanding of the motives, reasons and explanations for corporate hedging activity
• Knowledge of key financial building blocks, used in constructing complex derivative instruments (eg futures, forwards, options and swaps)
• Analysis of payoffs and strategies involved in trading derivative instruments and combinations of derivatives
• Application of the pricing of individual and combinations of derivative securities
• Use and benefits of derivatives in a portfolio context.

• Presentation 10%
• Assignment 1 (due in week 8) 10%
• Assignment 2 (due in week 12) 10%
• End of semester examination 70%
• TOTAL 100%

At least an average of 65% (or equivalent) in the final two years of an Australian undergraduate degree with at least one year of university level study in quantitative analysis, including basic mathematics and data analysis techniques.

See: http://ecocomm.anu.edu.au/courses/outline/FINM8009.pdf

See: http://ecocomm.anu.edu.au/courses/outline/FINM8009.pdf

For further information please refer to http://ecocomm.anu.edu.au/courses/course.asp?code=FINM8009