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INVE3000 Introduction to Derivative Securities
Trimester 1A, 2024
Syllabus
This unit covers the theoretical foundations of derivative securities, financial forwards and futures, forward rate agreements (FRAs) and swaps, model-independent option valuation, geometric Brownian motion, Black-Scholes-Merton model, binomial model, option Greeks, and model risk. This unit also discusses the impact of quantum Fintech on derivatives market. This unit includes analyzing a business case study and use Eikon real derivatives market data to solve work integrated problems.
Introduction
Welcome to INE3000 Introduction to derivative securities. The aim of the course is to provide students a clearer understating of theory and practice managing derivative securities, and the foundations necessary to pursue academic research or financial market careers in derivatives.
Unit Learning Outcomes
All graduates of Curtin University achieve a set of six Graduate Capabilities during their course of study. These inform an employer that, through your studies, you have acquired discipline knowledge and a range of other skills and capabilities which employers would value in a professional setting. Each unit in your course addresses the Graduate Capabilities through a clearly identified set of learning outcomes. They form a vital part in the process referred to as assurance of learning. The learning outcomes notify you of what you are expected to know, understand or be able to do in order to be successful in this unit. Each assessment for this unit is carefully designed to test your knowledge of one or more of the unit learning outcomes. On successfully completing all of the assessments you will have achieved all of these learning outcomes.
Your course has been designed so that on graduating you will have achieved all of Curtin's Graduate Capabilities through the assurance of learning processes in each unit.
Learning Activities
All students in this unit should participate in the weekly learning activities. You will be expected to engage this unit in the following ways:
l Attend lectures and read the textbook to understand the concepts
l Attempt questions for your weekly tutorials.
l Research and read articles/materials pertaining to derivative securities
l Ask questions!
LECTURES
It is recommended that students commit to a structured learning process to promote and reinforce deep learning. For example:
l Complete
l pre-reading (text chapters, lecture slides) and attend lectures, to familiarise yourself with the material and to identify shortfalls in understanding. Start with the textbook, attend lectures (if needed listen to ilecture multiple times), together they will direct you to what is important.
l Attend
l the lectures, take additional notes to clarify key concepts and to eliminate shortfalls in understanding. I encourage you to ask questions in the discussion board if more clarification is required.
l Review
l the lecture material later the same day. Identify any outstanding difficulties, and try to obtain answers from other sources (e.g. other textbooks, etc.). If not resolved, please post questions on the discussion board.
l Seek
l clarification on any issues you do not fully understand in the course material. In the event that there are still shortfalls in your understanding at the end of this process, ask the lecturer during consultation time with specific questions. Make sure you are prepared well, as lecturers do not give answers per se, they help you to discover the answers yourself.
TUTORIALS
Active participation is expected from students during tutorials. Participation includes, but is not limited to:
l Asking and/or answering questions;
l Attempting tutorial questions prior to tutorial class and being ready to discuss materials in class; and
l Demonstrating that you have read lecture slides, relevant text chapters, etc.
l Attend the tutorial and participate actively (hence attempt all tutorial questions prior to looking at answers, struggling with how to choose between alternatives is part of the learning process. Capitulating after minimal or no effort to the answers is not the way to learn).
Tutorials are your forum for informal feedback on your progress in the unit, as well as the primary means of solving issues as soon as they arise. The success of the tutorial process is in the hands of the students. A lack of engagement by students means a lost opportunity to improve your performance which is difficult to make up elsewhere.