CORPFIN 7020NA - Options Futures & Risk Management (M)

Ngee Ann Academy - Trimester 2 - 2015

This course examines the function and operation derivative markets serve in finance. To begin, the course identifies relationships that must hold in such markets if there are to be no arbitrage opportunities. The course then covers options pricing using the Binomial and Black-Scholes approach, as well as describing a wide range of futures and options dealing strategies, along with their applications to hedging and risk management. Currency and fixed-interest derivatives are also considered as well as swaps, options on futures and some alternative exotic options.

  • General Course Information
    Course Details
    Course Code CORPFIN 7020NA
    Course Options Futures & Risk Management (M)
    Coordinating Unit Adelaide Business School
    Term Trimester 2
    Level Postgraduate Coursework
    Location/s Ngee Ann Academy
    Units 3
    Available for Study Abroad and Exchange N
    Prerequisites CORPFIN 7005 & CORPFIN 7039
    Assessment Exam/assignments/tests/tutorial work as prescribed at first lecture
    Course Staff

    Course Coordinator: Professor Ralf Zurbrugg

    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes
    Knowledge and Understanding
    This course is designed to provide coverage of the principles behind the pricing and utilisation of derivatives as an investment tool plus hedging instrument. This course is geared towards those students following a pathway incorporating finance in their study program. This course forms part of RG146 ASIC requirements for providing financial derivatives advice in Australia, plus covers a significant amount of the body of knowledge on derivatives required for CFA examinations.

    Communication Skills
    The continuing development of good inter-personal and communication skills is widely recognised as important for all graduates. This course specifically seeks to develop students’ abilities to participate in discussions in tutorials.

    Learning Outcomes
    By the end of this course students should be able to:

    1.  Price American and European options
    2.  Price forward and futures contracts
    3.  Develop strategies to profit from mispriced derivative assets
    4.  Hedge underlying positions using derivatives
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. 1 and 2
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. 3 and 4
    An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. 3 and 4
  • Learning Resources
    Required Resources
    Text Books
    The course-reader contains the core material that will be covered within the course. However, it is also a requirement that you obtain a copy of one of the following texts and that you supplement your studies from the course-reader with one of these texts:

    • Chance, Don .M, An Introduction to Derivatives and Risk Management, any edition.

    • Kolb, R.W, Futures, Options & Swaps, any edition.

    • Hull, J., Options, Futures and Other Derivatives, any edition.

    Any of the above texts will be of immense use. However, this course is based around the Australasian market for derivatives and as such some differences exist between the textbook and what is taught in the lectures. This course also follows closely the body of knowledge deemed necessary for completion of the CFA levels I to III exams.

    Included in the study guide, are the following articles:
    • ‘What Does an Option Pricing Model Tell Us About Option Prices?’ by Stephen Figlewski, Financial Analysts Journal, Sept-Oct 1989.
    • ‘Risk Without Reward’ by James Glassman, The Browser – HARVARD magazine.
    • ‘How Leeson Broke Barings’ by IFCI Risk Institute at 
    • ‘Risk Management Lessons from Long-Term Capital Management’ by Philippe Jorion, European Financial Management Journal, 6:277-300, 2000.
    • ‘Derivatives Debacles’ by Anatoli Kuprianov, Federal Reserve of Richmond, Economic Quarterly, 81:4, 1995.
    Recommended Resources
    Perdisco e¬ workbook: 
    An online study resource has been developed for this unit to help you learn the content that will be covered. Using hundreds of interactive practice questions and problem solving exercises, the e workbook helps you make the most of your study time by offering:
    • The chance to practice and revise each topic until you completely understand it
    • Step-by-step feedback explaining why each answer you have given was correct or incorrect
    • Help that’s available when you need it (even outside of normal class hours)
    The e workbook will provide unlimited access throughout the course and can be purchased online by credit card, money order, cheque or BPAY. Payment instructions are provided after registration.
    To start using the e-workbook, visit and click on ‘Create a new account’.

    E workbook assessment tasks
    The e workbook is also being used to deliver interactive assessment tasks that will contribute to your overall assessment marks for this unit. The assessments can be submitted online from anywhere, are marked instantly and give you immediate feedback on your performance. You do not have to pay for the e-workbook to take the assessment, as non-paying students can access the Special Reserve online which provides access to students, but on a limited time basis only. Further details are contained on the MyUni course website in regards to the Special Reserve.
    Online Learning
    Videos are available of the topics covered in the course and serve as a learning-aid, not a replacement for attending lectures as the material presented can differ slightly on an annual basis.

    Other materials, including supplementary questions & answers, are also available on MyUni for students to work through as an addition to the regular tutorial questions. Finally, part of the assessment of this course is via online tests provided as a free service by Perdisco.
  • Learning & Teaching Activities
    Learning & Teaching Modes

    No information currently available.


    No information currently available.

    Learning Activities Summary

    No information currently available.

  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary

    No information currently available.

    Assessment Detail

    No information currently available.


    No information currently available.

    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy ( course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.