Undergraduate Course: Futures and Options (BUST10023)
Course Outline
| School | Business School |
College | College of Humanities and Social Science |
| Course type | Standard |
Availability | Available to all students |
| Credit level (Normal year taken) | SCQF Level 10 (Year 3 Undergraduate) |
Credits | 20 |
| Home subject area | Business Studies |
Other subject area | None |
| Course website |
None |
Taught in Gaelic? | No |
| Course description | The course covers the market structure, use and pricing of futures and options, two key elements of financial markets. Both allow users to modify and transfer risks, take speculative positions, and develop investment strategies and the markets in which they are traded are significant elements of most advanced economies. Key questions as to their applications and pricing form a specialist area in finance. In particular, options involve the development of complex models for, pricing and monitoring their behaviour. A sub-element of the course will examine the use and pricing of interest rate and cross-currency swaps. |
Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
Students MUST have passed:
Principles of Finance (BUST08003)
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | None |
| Additional Costs | None |
Information for Visiting Students
| Pre-requisites | Visiting students should have at least 3 Business Studies/Management courses at grade B or above (or be predicted to obtain this). We will only consider University/College level courses.
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| Displayed in Visiting Students Prospectus? | Yes |
Course Delivery Information
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| Delivery period: 2012/13 Semester 2, Available to all students (SV1)
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WebCT enabled: Yes |
Quota: None |
| Location |
Activity |
Description |
Weeks |
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
| Central | Lecture | | 18-22, 25-29 | 11:10 - 13:00 | | | | |
| First Class |
First class information not currently available |
| Exam Information |
| Exam Diet |
Paper Name |
Hours:Minutes |
|
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| Main Exam Diet S2 (April/May) | Futures and Options | 2:00 | | |
Summary of Intended Learning Outcomes
Objectives and Learning Outcomes, Knowledge and Understanding.
After completing this course, students should understand:
- the nature of derivatives;
- how arbitrage pricing works and how this sets prices in a competitive market;
- the idea of replicating portfolios or transactions;
- how futures contracts work;
- how futures are priced in a competitive market;
- the pricing of interest rate and cross-currency swaps;
- how market users make use of swaps to manage risks;
- the nature and types of options;
- option boundary conditions;
- the ways the binomial and Black-Scholes option pricing models are used to determine the fair value of a simple option;
- how to make extensions to the basic models to take account of dividends and early exercise;
- an understanding of how exotic options work;
- how to use their knowledge of arbitrage pricing methods for options and futures to undertake financial engineering; |
Assessment Information
| This will be a mixture of examination and assignment. The assignment is worth 40% of the course mark (2000 words). The examination represents 60% of course marks. |
Special Arrangements
| None |
Additional Information
| Academic description |
Not entered |
| Syllabus |
Not entered |
| Transferable skills |
Not entered |
| Reading list |
Not entered |
| Study Abroad |
Not entered |
| Study Pattern |
Not entered |
| Keywords | FO |
Contacts
| Course organiser | Dr Peter Moles
Tel: (0131 6)50 3795
Email: |
Course secretary | Ms Ruth Winkle
Tel: (0131 6)50 8335
Email: |
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