FIN-40037 - Module Specification
Keele Business School
Faculty of Humanities and Social Sciences

Programme/Approved Electives for 2024/25

Available as a Free Standing Elective

Co-requisites

None

Prerequisites

None

Barred Combinations

None

Description for 2024/25

This module introduces students to the modern multi-trillion dollar derivative markets. Students will gain an insight into the different types of derivative instruments that are widely traded in the derivatives markets as well as those that are developed for specific needs. Students will explore the complex valuation techniques which have been developed to manage derivatives. Finally students will learn how derivative instruments can be used to manage complex market positions and the catastrophic losses that may occur if they are misunderstood and mis-applied

This module introduces students to financial derivatives such as forwards, swaps and options, and their respective markets. Students will learn about the underlying techniques to value derivative securities and how they can be used to manage risk.

Intended Learning Outcomes

demonstrate a systematic awareness of the derivatives market and the role played by complex financial instruments leading to periodic market volatility and failure: 1,2
critically assess the limitations, the use and the valuation of linear pay off derivatives such as forwards and swaps: 1,2
synthesise different combinations of options to develop complex payoffs
: 1,2
critically appraise stochastic processes and their applications to price derivative securities: 1,2
demonstrate and apply risk neutral valuation methods to value derivatives and manage their risk
: 1,2
critically evaluate price options using both analytical formulae and numerical schemes: 1

Study hours

20 hour lectures
4 hour tutorials
126 hours independent study and assessment preparation

School Rules

None

Description of Module Assessment