BFC2751: Derivatives 1

30% mst - fair test
12% assignment - every question was googable. they sent an email out giving people zeros for those who copied word for word smh. if they wanted to avoid this, dont reuse questions
8% class participation - so i wasnt aware that participation actually meant participation smh. my tutor actually recorded everyones particpation but never asked any questions to specific people and only kept asking questions to her favourites so wtf was up with that? i wasnt aware participation actually meant participation. anyways 5% was given to those who participated heavily and another 3% was available for posting a practice exam question on the forums
50% final exam - fair exam

i struggled with this unit at the start as i do admit it was quite difficult to grasp my head around some of the concepts but as soon as you do get the things they teach you, everything else comes naturally. for example, option strategies was such a difficult and exhausting part of the unit but come to think of it, it was quite easy once you remember the basics. it might be overwhelming but if you break it down, you can do well. this basically applies to all other parts of the unit.
this is one of the well taught finance units. what left a bitter taste in my mouth was the participation marks but thats another story.
ali was a worse lecturer than li but maybe thats because he had harder content to teach? arbitrage opportunities is quite daunting at first but it does get better. he made me want to drop the unit but i couldnt anyways lmao so i was just being dramatic. advice for those wanting to do well: make sure you do all your tutorial questions before hand (google solutions if you must) so that you can ask questions during the tutorial as they only have 1 hr to fit in all the questions so they do rush. make sure you stay on top of the unit and just ask ask ask questions! btw stay away from alison the tutor smh

ali sheikhbahaei and li ge

Yes, 1

4 out of 5

Yes, with screen capture

no

1x 2hr lecture
1x tutorial

sem 2 2019

hd

30% Mid-semester test
10% Participation
10% Assignment

This was where students were to write 1000 words on what can we learn from financial disasters? Two topics were provided, either the London Whale case from JP Morgan Chase, or the collapse of Baring Bank.
Students’ last names starting with A to M were told to write on Baring bank, whilst last names starting with N to Z were told to write on JP Morgan Chase. This was quite straightforward to do, as it was the kind of essay you'd write in a marketing or management context, not finance which is usually more practical. That being said, the average mark for this was 7.1/10 as students normally skimmed over stuff and missed the finer details.

Give your overall opinion of the subject, lecturers, assessment etc. and a recommendation, plus anything else which you feel is relevant.

Really interesting subject for anyone doing a finance major. It is incredibly real-world, as it goes through products (derivatives) which are actively traded on the financial markets today. The course starts off with an overview of derivatives, before looking at futures and forwards and how they are priced. Then basic options are covered + crucial concepts such as put-call parity, which form a key part of the exam.

After the mid-semester test, trading strategies in options are covered, followed by binomial trees. Then the Black-Scholes-Merton model and Greek letters are covered.

What is key to know is that this subject has changed from previous years, and is now taught in a traditional approach of lectures/tutorials, in a purely theoretical way. All excel coding has been removed from this subject, with the exception of implied volatility, but this is not examinable in that format. So, to do well in this subject, focus should be paid on understanding the content in a theoretical way, by going through tutorial questions themselves + lecture notes.

Worth 50%, this consisted of 5 questions. The first question was 10 short answer questions covering all topics of the course. Question 2 was on option trading strategies, and asked how to design a short strangle strategy based on the options given to trade in. Question 3 was on binomial trees. Question 4 was on the Black-Scholes-Merton (BSM) model with interpretation, and question 5 was related to Greek letters. It seemed as though this exam had little difficulty to it, resulting in nearly 60% of the cohort scoring 80% or higher on the final exam. The median of the exam was 41/50 which again seems too high to how an exam distribution would usually be structured. This seems to be a once-off thing, as in the future the exam should be much harder in order to gain a far-more streamlined curve.
Overall, this was a highly enjoyable unit for me. Although I did not do that well in the in-semester assessments, I was extremely lucky with the exam and scored highly in it. To succeed in this unit, get the textbook, do the questions over and over again, and try and get some old past exams (if they're still available), as practice is perfect to do well here.

Zhe (Andrew) An - Also the CE. Was his first time taking the subject, so seemed a bit distant from the content, and it was tough to understand him in the lectures as a result. He was also coughing for the majority of the lectures that I went to (on Fridays) so made it a little tricky to understand him as a result. But in consultations he seemed like a very decent guy who wanted to help out his students as much as possible.

This was held at the Caulfield Racecourse on a Monday night when one of the lecture streams usually took place. It consisted of 4 questions with a total of 30 marks. The first question was about differences between forwards/futures, second was margin calls, third calculating prices of forwards and futures and 4th on put call parity. In general most students did not do that well on this, with the average mark being around 60%. This is probably because of time constraints, as there was only 1hr to answer everything and time was perfectly calculated to answer all questions. I did not do that well on this, mainly because of being flustered and confused with some of the wording of the questions, but it was not worded in that confusing of a manner overall.

- This consisted of 8% coming from work done in tutorials, with the remaining 2% being via posting a question and answer on the Moodle discussion forum with an exam relevant question. This question had to be original, with feedback provided on common mistakes. However, this was an easy 2% to receive, as if you posted on Moodle then you got the marks. The remaining 8% consisted of 2% for presentations in tutorials and 6% for just showing up to your tutorial and answering questions. My tutor scrapped the presentation marks due to time constraints and knowledge that students didn't want to present which was very kind of him. This enabled all 10% of marks for this section to be very easy to gain.

No past/sample exams provided. Practice questions provided which are very similar to the final exam questions.

4 out of 5

Yes, with screen capture

Options, futures and other derivatives (9th edition, global edition) - Very valuable to have this book for this subject, either in hard or soft copy. It goes over the content in a far more stripped down form, plus all the tutorial questions are taken from this book each week. It also has extra questions to do for the exam as practice to go over everything again, so highly beneficial to get this.

1x 2hr lecture per week
1 x 1hr tutorial per week

Semester 1, 2019

81 HD