Module: Financial Instruments & Strategies

Module Specifications.

Current Academic Year 2024 - 2025

All Module information is indicative, and this portal is an interim interface pending the full upgrade of Coursebuilder and subsequent integration to the new DCU Student Information System (DCU Key).

As such, this is a point in time view of data which will be refreshed periodically. Some fields/data may not yet be available pending the completion of the full Coursebuilder upgrade and integration project. We will post status updates as they become available. Thank you for your patience and understanding.

Date posted: September 2024

Module Title	Financial Instruments & Strategies
Module Code	EF4144 (ITS) / FBA1012 (Banner)
Faculty	DCU Business School	School	DCU Business School
Module Co-ordinator	Sandeep Keshava Rao
Module Teachers	Anand Kumar, Cathal Guiomard, Michael Dowling, Shaen Corbet
NFQ level	8	Credit Rating	5
Pre-requisite	Not Available
Co-requisite	Not Available
Compatibles	Not Available
Incompatibles	Not Available

None

Description

This module aims to develop students understanding of some of the main uses and applications of financial instruments and strategies in the process of managing the main needs of borrowers, investors and financial intermediaries in financial markets.

Learning Outcomes

1. Identify the main types of financial risks faced by corporations and financial institutions.
2. Assess some of the main strategies that may be used to manage the various types of financial risks.
3. Value some simple financial instruments and explain the process of how more complex financial products may be valued.
4. Critique recently developed metrics and concepts in the areas of financial engineering and risk management
5. Identify the potential risks and limitations associated with valuation models being used

*Type*	*Hours*	*Description*
Workload	Full-time hours per semester
Assignment Completion	15	Answer assigned short answer questions and problems
Independent Study	40	Reading references (textbook and lecture notes) for weekly lectures. This should be done ahead of weekly lectures, to maximize in-class learning and allow the students to actively debate the material presented in class, and after the lectures, to solidify t
Lecture	24	No Description
Seminars	6	Participative attendance of seminars offered by industry experts and/or academics
Independent Study	40	Exam preparation
Total Workload: 125

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

No-arbitrage pricing
Replication of financial and non-financial payoffs, No-Arbitrage and Risk Neutral Valuation

Forwards and futures
Forward rate agreements (FRAs); synthetic agreements for forward exchange (SAFEs); currency forwards and futures; short-term interest rate futures; T-Bill futures; market timing and duration; stock index futures; stock market timing with futures

Swaps
Currency and interest rate swaps; managing interest rate risk and currency risk with swaps

Options
Hedging and volatility: delta hedging; option spreads and stock options: synthetic securities, bull and bear spreads, straddle, strangle, butterfly and condor, stock options; interest rate options (including caps, floors, collars, swaptions); foreign currency options; future options; portfolio insurance

Managing risk
Market and credit risk in financial and non financial firms; defining and measuring market and credit risk exposures; risk reduction vs. yield enhancement techniques; buying and selling convexity; structured finance and securitization

Assessment Breakdown
Continuous Assessment	100%	Examination Weight	0%

Type	Description	% of total	Assessment Date
Course Work Breakdown
Assignment	Assignment	100%	Sem 1 End

Reassessment Requirement Type
Resit arrangements are explained by the following categories: Resit category 1: A resit is available for both* components of the module. Resit category 2: No resit is available for a 100% continuous assessment module. Resit category 3: No resit is available for the continuous assessment component where there is a continuous assessment and examination element.
* ‘Both’ is used in the context of the module having a Continuous Assessment/Examination split; where the module is 100% continuous assessment, there will also be a resit of the assessment
This module is category 1

Indicative Reading List

John Hall: 2015, Options, futures, and other derivatives, 6th and later, 1 - 8, Pearson,

Other Resources

None