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FIN30160

Academic Year 2024/2025

Financial Economics II (FIN30160)

Subject:
Finance
College:
Business
School:
Business
Level:
3 (Degree)
Credits:
5
Module Coordinator:
Dr Juan Arismendi-Zambrano
Trimester:
Spring
Mode of Delivery:
On Campus
Internship Module:
No
How will I be graded?
Letter grades

Curricular information is subject to change.

This module covers topics on the modelling of derivatives in financial economics. Topics include forwards, futures and swaps, models of asset price dynamics, arbitrage theory and replication arguments, valuation of derivative securities using the binomial model and the Black-Scholes model, exotic options, numerical methods for the valuation of exotic options, term structure modelling and credit risk modelling. The module endeavors to emphasize fundamental principles and to illustrate how these principles can be mastered and transformed into sound and practical solutions of actual investment problems.

About this Module

Learning Outcomes:

At the end of this course students should:

1. Have knowledge and comprehension in the theory and practice of derivatives, one of the most important areas of financial economics
2. Appraise one of the most important theories of modern finance, option pricing theory, and its implications for financial markets
3. Describe key concepts such as arbitrage, derivative replication and risk neutral valuation and recognize the practical usage, strengths and shortcomings of these methods
4. Explain the theory and practice of option pricing models, term structure models and credit risk models
5. Critique and back test option pricing models as applied to real world market data

Student Effort Hours:
Student Effort Type Hours
Specified Learning Activities

24
Autonomous Student Learning

65
Lectures

24
Tutorial

12
Total

125

Approaches to Teaching and Learning:
Lectures, in-class coding lab, in-class discussions
Tutorials and problem-based learning
Peer and group work
Critical writing
Presentation

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Incompatibles:
ECON3005J - Financial Econ:Derivates&Risk, ECON30170 - Intermediate Financial Econ

Equivalents:
Fin Econ 1 (FIN30010)


 

Assessment Strategy
Description Timing Component Scale Must Pass Component % of Final Grade In Module Component Repeat Offered
Exam (Online): The continuous assessment component consists of ten quizzes, each valued at 10 marks. These quizzes are designed to be completed within a total duration of one hour during a 5 day window. Week 2, Week 3, Week 4, Week 5, Week 6, Week 7, Week 8, Week 9, Week 10, Week 11 Alternative linear conversion grade scale 40% No
100
 No

Carry forward of passed components
Yes
 

Resit In Terminal Exam
Autumn Yes - 2 Hour
Please see Student Jargon Buster for more information about remediation types and timing. 

Feedback Strategy/Strategies

• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment

How will my Feedback be Delivered?

Not yet recorded.

Name Role
Mr Karthik Varma Vadapalli
 Tutor
Qiyue Zhang Tutor
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