52507 FINANCIAL RISK MANAGEMENT

Year	No.	Offer	Mode	Description			Cred. Pts
01	52507 	S3  	X 	FINANCIAL RISK MANAGEMENT 	1.00

Contents


STAFFING:

Examiner: S. MC CARTHY
Moderator: K. SIMPSON
Instructional design: C. COTTMAN

RATIONALE:

The deregulation of financial markets has resulted in the need for increased awareness by corporations, as financial decisions are exposed. This risk principally arises due to unexpected changes in interest rates, exchange rates, commodity prices and equity price movements. In response to the challenge of managing these risks, derivative instruments have provided the means for the financial engineering of strategies for the appropriate risk management needs of each firm or individual.


SYNOPSIS:

This unit examines advanced theoretical, empirical and practical aspects of corporate risk management. The unit provides the opportunity to identify, measure and respond to the risk management problems of organisations and individuals through the use of strategies involving derivative market products such as forwards, futures, options and swaps.


OBJECTIVES:

On successful completion of this unit students will be able
to:

  1. Identify and describe financial risk.
  2. Quantify financial risks.
  3. Price and apply futures, options and swaps.
  4. Develop financially engineered strategies to the management of
    interest rate, exchange rate, commodity price and equity price
    exposures.
  5. Assess the feasibility of speculative trading strategies.
  6. Assess the performance of risk management strategies through
    the application of appropriate benchmarks.

TOPICS:

 Description                                                    Weighting(%)
  1. Rationale for financial risk management 10.00

  2. Futures 30.00

  3. Options 30.00

  4. Swaps 20.00

  5. Performance Evaluation 10.00


TEXT and MATERIALS required to be PURCHASED or accessed:

Hull, J., 1998, Introduction to Futures and Options Markets, 3rd
edn, Prentice Hall International.


STUDENT WORKLOAD REQUIREMENTS:

	ACTIVITY				HOURS
Directed Study                                	56
Private Study                                 	89
Assessments                                   	20

ASSESSMENT DETAILS:

No  *F/S Marks     Due        Description                              Wtg(%)    LBL WWW
1   S    100.00    11/01/02  ASSIGNMENT 1                              35.00     Y   N
2   S    100.00    END S3    EXAMINATION 3 HOURS                       65.00     N   N

*F=Formative, S=Summative

OTHER REQUIREMENTS:

1    To  achieve  a passing grade in this unit, students must  attempt
     all  of  the assessments, achieve at least 50% in the examination
     and  at  least  50% of the available marks for  the  unit.  Final
     grades  for  the unit will be determined by the addition  of  the
     marks  obtained  in  each assessment item,  weighted  as  in  the
     Assessment  Details  and by considering the  student's  level  of
     achievement of the objectives of the unit.
2    Students  must  retain a copy of all pieces of  assessment  which
     must be produced if/when required by the lecturer.
3    LATE ASSIGNMENTS
3.1  All  assessments submitted after the due date (and  not  approved
     for  extension)  in  accordance with university  policy  will  be
     penalised 20% per working day.
3.2  If  students  submit assignments after the due date and  wish  to
     claim extenuating circumstances then they shall provide validated
     documentary   evidence  with  the  assignment,   explaining   the
     circumstances.
3.3  The  unit  examiner shall consider the statement  accompanying  a
     late assignment and decide on the outcome.
4    Assignments  not submitted in the appropriate assignment  folders
     will be deemed as not being received.
5    DISHONEST ACTIONS
5.1  Any student who is alleged to having performed a dishonest action
     relating  to  any assessment in the unit will have  a  course  of
     action   taken  against  him/her  as  outlined  in  the  Academic
     Regulations.
5.2  Pieces  of  assessment should be the work of individual students.
     Joint  pieces  of  assessment are not  permitted  unless  written
     approval has been obtained from the unit leader.
6    DEFERRED EXAMINATIONS
6.1  Deferred examinations will be granted at the Dean's discretion in
     the  case of medical or compassionate circumstances having regard
     to  item  1. If a deferred examination has been granted  students
     shall  normally sit the deferred examination in the  semester  in
     which  the  unit  is  nextoffered, BUT NO  LATER  THAN  THE  NEXT
     SEMESTER  3  EXAMINATION PERIOD. If, for  whatever  reason,  this
     deferred examination is not taken then the student will be graded
     `F'.
6.2  Medical  evidence  on  the  appropriate  University  of  Southern
     Queensland  medical certificate or doctor's certificate  must  be
     received  by  the Faculty Administrator no later than  twenty-one
     (21)  days after examination date. A medical certificate must  be
     dated  with the same date as the period of illness for which  the
     absence from examination is being sought and clearly indicate the
     student's  name  and, if possible, student number. (Retrospective
     medical  certificates will not be accepted for either  assignment
     work   or  examinations.)  Only  original  or  certified  medical
     certificates will be accepted.
6.3  A student's medical condition must be stated clearly (IN ENGLISH)
     (Certificates stating a student has a `Medical Condition' may not
     be  sufficient  grounds  for deferment of  examination).  Medical
     evidence  must  cover the student for the day(s)  of  the  missed
     examination(s).
6.4  Requests must be in writing to the Faculty Administrator  clearly
     stating  the  student  name  and  number,  unit  number  of   the
     examination  missed due to illness and current address.  Deferral
     of  an  examination CANNOT be granted on an existing deferral  in
     that unit.
6.5  Requests  on  grounds  other than medical MUST  BE  supported  by
     documentation.
6.6  Students  must have submitted a genuine attempt at all  mandatory
     assessment items.
6.7  Students   who   have  a  medical  condition  or   have   genuine
     compassionate  or  work  related  problems  on  the  day  of  the
     examination  are advised to obtain documentary evidence  and  NOT
     attempt  the  examination. If a student makes an attempt  at  the
     examination,  the  assessment item will be  marked  and  a  grade
     awarded. In these cases, a student cannot, after receiving a Fail
     grade, request a deferred examination or special consideration.
6.8  Students who have been granted deferred examinations will not  be
     granted a waiver of prerequisites, without the permission of  the
     Heads of Department, in subsequent semesters (if they do not have
     a passing grade).
7    Unit  weightings of topics should not be interpreted as  applying
     to  the  number  of  marks allocated to questions  testing  those
     topics in an examination paper. The examination may test material
     already tested in assignments.
8    Mechanised erasers, mobile telephones and other electronic  media
     are not permitted in exam venues.
9    The  examination will be restricted. Students will be allowed  to
     bring a quiet, battery-operated non-programmable calculator  into
     the   examination.  Dictionaries  are  NOT  to  be  used  in  the
     examination.
10   Students  should also refer to the Faculty of Commerce `Guide  to
     Policies  and Procedures' section of the University Handbook  for
     further information on the above matters.
11   Computer/Software requirements are outlined in  the  introductory
     booklet  for external students or will be outlined in the initial
     lecture for internal students.

This information is accurate as at 15/01/02