BFC3340: Derivatives 2

- each week there was a quiz to do related to the lecture content of the week. The quiz was available from Monday to Friday, and due 11am Friday (24 hrs after the lecture ended which was on Thursdays from 9-11am). The quiz related to the content of the

- Ah the trading game. The make it or break it. After you do this unit, you might think why did we have to do a trading game when the unit is entirely theoretical? Because it helps quantify and teach you important lessons about risk. For the assignment, you have to at a minimum make 5 opening orders (i.e. buying/shorting) and 5 closing orders (i.e. selling / covering) options and futures. It is important that you do close out your orders otherwise marks are deducted. What is the goal here? Of course the goal is who can make the most money, but risk is a huge issue here.

- The assignment consisted of 3 questions and covered weeks 1-7 content. To ensure that students could do it online, it was converted from a handwritten assignment to one that used Math written on a computer + Excel / MATLAB files. That being said, it mostly followed tutorials, so was not extremely difficult and relatively straightforward to understand if you knew the concepts well.

- The exam consisted of a few short answer questions, some mathematical derivations which you could write into a Word document, and some computational questions which you could complete in either Excel or MATLAB. I found the exam to be relatively straightforward, but strict marking meant that marks were far different to predicted. I emphasised this in my review before, but

- Also chief examiner. Binh took all the lectures whilst talking to an empty room in both Caulfield & Clayton, and I appreciate him for still trying to get students involved despite all the difficulties when this unit was taken. Binh was very knowledgable and easy to understand, but does go through a lot of content in the lectures, so try and pickup on key details otherwise you might forget things and be in trouble for assessments. My advice would be to rewatch the lecture after attending it live, so that you can catchup and see what you have forgotten before.

Firstly, this subject is quite new, as it has only been taught in its current format since around 2017. Don't let that scare you though. It is a superb unit! Superb, superb, superb! It has to be easily the best finance unit I have taken at Monash, due to Michael Ciaravolo (or Trav) being in charge of the whole unit. Trav's explanations are by far the best bit of the unit. If you have had Trav as a tutor in the past, wait until you take derivatives 2! His teaching is far above anything that has been taught in any other subjects.

Yes, S2 2019 exam provided with solutions

4.5 out of 5

Yes, with screen capture

- The 1 hr tutorials were all run via Zoom this semester due to COVID-19. However, they were still excellent. In fact I preferred them compared to in-person tutorials, as I found myself to be far more focused due to Trav's teaching style. I had Trav as my tutor, and he did definitely not disappoint! He was always prepared and open to answering questions. Also unlike other tutors, Trav ran consults even in mid-semester break, which really helped to clarify assignment content and set me on the right track!

Topics covered included:

Black-Scholes-Merton Revisited, Futures Options (not examinable this year but may change in the future), exotic options, numerical methods, Value-at-Risk, interest rate forwards futures and swaps, interest rate options and credit default swaps.
To be honest, I did not find the content to be excessively useful for my future career. However, there is still an advantage to taking this unit. Do you reckon that you will be a financial trader in the future? Or do you have a goal to work at an investment bank? Then take this unit. The products taught (such as swaps and options) are quite heavily traded in financial markets, so knowing what they are and how to price them will be useful. But Trav's teaching experience makes it useful for everyone. Definitely give this a shot if you are looking for a spare finance unit to do in semester 2. Be mindful that derivatives 1 (BFC2751) is a pre-requisite, and is heavily relied upon, but the skills you learn in this unit will be incredibly valuable to you in the future!

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

Semester 2, 2020

HD