Finance (FNCE) 403
Risk Management (Revision 2)
Revision 2 is closed for registrations, replaced by current version
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Delivery Mode: Individualized study online or grouped study**
Credits: 3
Area of Study: Applied Studies
(Business and Administrative Studies)
Prerequisite: FNCE 370 or equivalent. MATH 260 or equivalent is recommended.
Centre: Faculty of Business
FNCE 403 has a Challenge for Credit option
Overview
FNCE 403 provides an introduction to risk management, an area with increasing importance in both modern financial academia and financial industry. The course will focus on risk management using derivative securities. The main objectives of FNCE 403 are to
- introduce the basic concepts and methodologies of risk management using derivative securities, including options, futures, forwards, and swaps.
- provide students with an introduction to the basic characteristics and valuation of various derivative securities.
- explore the applications of derivatives to manage various risks such as market risk, currency risk, interest rate risk, and credit risk.
Outline
Unit 1: Introduction
- Lesson 1: Derivative Securities
- Lesson 2: Some Important Concepts in Derivative Markets
- Lesson 3: The Role and Some Criticisms of Derivative Markets
Unit 2: Options
- Lesson 4: Options Markets
- Lesson 5: Basic Option Strategies
- Lesson 6: Advanced Option Strategies
Unit 3: Option Pricing
- Lesson 7: Principles of Option Pricing
- Lesson 8: Option Pricing—The Binomial Model
- Lesson 9: Option Pricing—The Black-Scholes-Merton Model
Unit 4: Forwards and Futures
- Lesson 10: Forward and Futures Markets
- Lesson 11: Pricing Forwards and Futures
- Lesson 12: Futures Hedging
Unit 5: Swaps and Interest Rate Derivatives
- Lesson 13: Interest Rate Swaps
- Lesson 14: Currency Swaps
- Lesson 15: Interest Rate Forwards and Options
Unit 6: Financial Risk Management
- Lesson 16: Financial Risk Management Techniques
- Lesson 17: Risk Management in Organizations
Evaluation
To receive credit for FNCE 403, you must pass the final examination and achieve a course composite grade of at least a “D” (50 percent). The passing grade for the examination, under Athabasca University's alpha grading system, is “D” (50 percent). Your final mark will be determined by your marks on three assignments and a final examination. The chart below provides the credit weight associated with each of these requirements.
| Assign 1 | Assign 2 | Assign 3 | Final Exam | Total |
|---|---|---|---|---|
| 15% | 15% | 15% | 55% | 100% |
To learn more about assignments and examinations, please refer to Athabasca University's online Calendar.
Course Materials
Textbook
Chance, D. M., and Brooks, R. (2010). An introduction to derivatives & risk management, (8th ed.). Mason, OH: South-Western Cengage Learning. ISBN 978-0-324-60121-3
Other materials
All other materials will be available to students online.
Challenge for Credit Course Overview
The Challenge for Credit process allows students to demonstrate that they have acquired a command of the general subject matter, knowledge, intellectual and/or other skills that would normally be found in a university level course.
Full information for the Challenge for Credit can be found in the Undergraduate Calendar.
- Undergraduate Challenge for Credit Policy
- Undergraduate Challenge for Credit Procedures
Challenge Evaluation
To receive credit for the FNCE 403 challenge registration, you must achieve a grade of at least “D” (50 percent) on the examination.
Paper Exam (3 hours)
Undergraduate Challenge for Credit Course Registration Form
Athabasca University reserves the right to amend course outlines occasionally and without notice. Courses offered by other delivery methods may vary from their individualized-study counterparts.
Opened in Revision 2, May 13, 2011.
View previous syllabus