BFC5915 Options, futures and risk management
Faculty of Business and Economics
BFC5915 Options, futures and risk management is a level 5, 6-credit-point, postgraduate unit from the Faculty of Business and Economics, offered in 2023 in Semester 1 and Semester 2 at Clayton. It needs BFF3121, BFF5220, BFW3121, BFC5935 or BFB3121 and unlocks 1 unit.
- Credit points
- 6
- Offered in 2023
- Semester 1, Semester 2
- Clayton
- Assessment
- Exam 120%
- and 2 other tasks
- Workload
- 144 hours
- per semester
This is the 2023 handbook entry. See the 2024 entry.
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Requisites
Before BFC5915
Prohibitions
You can't enrol if you have passed any of these.
Prerequisites
Pass these before you enrol.
After BFC5915
1 unit list BFC5915 as a prerequisite or corequisite.
Enrolment rules
You must be enrolled in course B4001, B5001, B6001, B6003, B6004 or B6005 to undertake this unit.
Overview
This unit examines how options and futures can be used for hedging risk in the process of risk management. Several aspects of risk management are examined, including the reasons why investors indulge in this activity, how value is created via risk management, and the firm-wide approach to risk management (given that any firm is exposed to a wide variety of risks). Once the importance of risk management has been established, emphasis turns to the use of derivatives (futures and options) to manage risk. To understand how they are used to manage risk, the unit also considers the characteristics and pricing of these instruments, including some exotic versions.
Offerings in 2023
| Teaching period | Campus | Mode |
|---|---|---|
| First semester | Clayton | On campus |
| Second semester | Clayton | On campus |
Assessment
- Within semester assessment40%
- ExaminationThreshold hurdle60%
- Within semester assessment40%
- Examination60%
Learning outcomes
When you finish this unit, you should be able to:
- 1
examine the financial risk management function and its evolution in the corporate world
- 2
understand the characteristics of futures and options markets and be able to apply these instruments so as to hedge the risk exposure of the firm
- 3
design appropriate risk management strategies using options and futures for hedging and speculation
- 4
demonstrate effective research skills to produce a professional quality business report recommending a solution to a risk management problem
- 5
demonstrate in an individual summative assessment task the acquisition of a comprehensive understanding of derivative instruments in financial markets, both the mechanism of their operation and their application in hedging risk exposures.
Workload and teaching
- Seminars36 hours
- Teaching approachActive learning
Minimum total expected workload to achieve the learning outcomes for this unit is 144 hours per semester typically comprising a mixture of scheduled learning activities and independent study. Independent study may include associated readings, assessment and preparation for scheduled activities. The unit requires on average three/four hours of scheduled activities per week. Scheduled activities may include a combination of teacher directed learning, peer directed learning and online engagement.
This unit engages you in actively applying your knowledge, skills and attributes in interactive, collaborative and reflective activities.
Learning resources
Required resources
Hull, J. C. (2017). Options, futures and other derivatives (9th Global Ed.). Pearson Education.
Technology resources
There may be an additional cost associated with purchasing a physical and/or virtual calculator. Specific details will be provided in the Learning Management System by commencement of Orientation week.
Contacts
- Chief Examiners
- Dr Li Ge
- Associate Professor Jin Yu
Common questions
What are the prerequisites for BFC5915?
You need BFF3121, BFF5220, BFW3121, BFC5935 or BFB3121 before you enrol. Enrolment rules also apply.
What can I take after BFC5915?
BFC5915 is a prerequisite or corequisite for 1 unit, including BFF5340.
When is BFC5915 offered?
In 2023, BFC5915 runs in Semester 1 and Semester 2 at Clayton.
How much work is BFC5915?
The handbook expects about 144 hours of study across the semester. No students have rated its difficulty yet.
Does BFC5915 have an exam?
Yes. The exam is worth 120% of the final mark, alongside 3 other tasks.