Module description
What is the module about?
This module provides a comprehensive exploration of financial derivatives, offering a solid foundation in key concepts and strategies within this field. It begins with an in-depth study of options, forwards, futures, and swaps, ensuring students develop a strong understanding of these essential financial instruments. As the course progresses, students will gain practical skills in managing financial risks related to interest rates and international trade through various derivative strategies.
The curriculum then broadens its scope to international corporate finance, followed by a detailed examination of mergers and acquisitions (M&A) and their impact on financial markets. Next, corporate payout policy is explored, emphasizing its strategic role in corporate financial decision-making. The focus then shifts to short-term finance and planning, addressing their unique characteristics and significance in financial markets. The final component of the module is an in-depth analysis of the 2007–2008 credit crisis, providing students with insights into its causes, consequences, and lasting effects on global markets.
By integrating theoretical foundations with real-world applications, this module equips students with the analytical tools and practical expertise necessary to understand the complexities of modern financial markets and risk management.
Should I have studied finance before to take this module?
Definitely, to take this module, students should have completed 4QQMB101 Introduction to Accounting and 5QQMB201 Fundamentals of Finance to ensure they have the necessary foundational knowledge. While prior finance studies are essential, this module also requires a reasonable level of mathematical proficiency, as it involves a significant amount of numerical calculations. If you are comfortable with financial concepts and quantitative analysis, you will be well-prepared for the module.
Who should do this module?
This module is exclusively open to the following students:
- BSc Joint Honours (Management and Languages, Mathematics and Management, Computer Science and Management)
- Students in external departments who have a module-sharing agreement with KBS
- Study Abroad students
Provisional Lecture Outline
Lecture 1: Financial Options
Lecture 2: Forwards, Futures, and Swaps
Lecture 3: Managing Interest Rate Risk
Lecture 4: Managing Currency Risk
Lecture 5: International Corporate Finance
Lecture 6: Mergers and Acquisitions
Lecture 7: Corporate Payout Policy
Lecture 8: Short-term Finance and Planning
Lecture 9: Securitization and the Credit Crisis of 2007–2008
Lecture 10: Revision
Assessment details
100% Examination.
For semester 1 only study abroad students, an alternative assessment will be set in lieu of the in-person exam.
Teaching pattern
Weekly lectures
Weekly tutorials
Suggested reading list
Textbook
Core readings:
Recommended readings: