Financial Risk Management - 2016

This page is for past year, View 2017 unit details.

Unit summary


  • Level of Study: Undergraduate Level 3
  • Study load: 0.125 EFTSL
  • Delivery method: Fully Online
  • Prerequisites: Yes
  • Duration: 13 weeks
  • Government loans available: FEE-HELP, HECS-HELP
  • Availability for 2016: SP3
  • Assessment: Assignment 1 - Group (10-20%) , Invigilated Exam - (50-60%) - Learn more

Unit provided by

2016 Fees
Domestic 1,305.00
HECS 1,305.00
International 1,555.00

The overall aims of this unit of study are to enable students to be able to analyse the sources of financial risk as well as the importance of implementing effective financial risk management procedures in business entities. Students will also learn to how to mitigate financial risks using a variety of financial derivatives.

After successfully completing this unit, you will be able to:

  1. Analyse the sources of financial risk and the importance of implementing effective financial risk management procedures in business entities
  2. Analyse how futures and forward markets operate and be able to calculate theoretical forward and futures prices and values
  3. Analyse and apply a variety of hedging and trading strategies using options.
  4. Evaluate hedging strategies using forwards, futures, options and swaps to hedge identified financial risks in currencies, interest rates, commodities and shares and to evaluate the outcomes of these strategies
  5. Evaluate the need for sound financial risk management policies and procedures in organisations and to make ethical decisions
  • Assignment 1 — Group (10-20%)
  • Invigilated Exam — (50-60%)
  • Test — (30-40%)
For more information on invigilated exams see Exams and results

Mandatory prerequisites

You must have successfully completed the following unit(s) before starting this unit:

If you have completed equivalent study at another university, please contact a Student Advisor for advice.

This unit addresses the following topics.

1Introduction to financial risk management
2Options - option types, option payoffs, principles of option pricing, option strategies, hedging with options
3Interest rate and foreign currency swaps.
4Futures and forwards - pricing, valuation and their use in hedging financial risk
5Interest rate derivatives, using interest rate caps and collars for hedging
6Credit derivatives - credit default swaps (CDS); collateralised debt obligations (CDO)
7Financial risk management policies and procedures, ethics and governance

Each unit offered through OUA provides students with unit information that includes assessment topics and due dates, policy information and contact numbers for university support and academic staff. Study materials will also clearly outline each week's topic, readings, student activities and the format of all assessment.

This unit is part of a major, minor, stream or specialisation in the following courses:

This unit may be eligible for credit towards other courses:

  1. Many undergraduate courses on offer through OUA include 'open elective' where any OUA unit can be credited to the course. You need to check the Award Requirements on the course page for the number of allowed open electives and any level limitations.
  2. In other cases, the content of this unit might be relevant to a course on offer through OUA or elsewhere. In order to receive credit for this unit in the course you will need to supply the provider institution with a copy of the Unit Profile in the approved format, which you can download here. Note that the Unit Profile is set at the start of the year, and if textbooks change this may not match the Co-Op textbook list.

Textbooks are subject to change within the academic year. Students are advised to purchase their books no earlier than one to two months before the start of a unit.

Click on the titles of the listed books below to find out more:

Required textbooks

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