INVE3000 (V.1) Introduction to Derivative Securities

Trimester 3A, 2025

Unit study package number:

INVE3000

Mode of study:

Internal

Tuition pattern summary:

Note: For any specifi c variations to this tuition pattern and for precise information refer to the Learning Activities section.

Lecture: 1 x 2 Hours Weekly

Tutorial: 1 x 1 Hours Weekly

This unit does not have a fi eldwork component.

Credit value:

25

Pre-requisite units:

(FNCE2000 (v.0) Introduction to Finance Principles or any previous version

OR

12607 (v.0) Finance Principles 215 or any previous version

OR

2807 (v.0) Managerial Finance 212 or any previous version

OR

FNCE2003 (v.0) Business Analysis for Investment or any previous version

OR

FNCE2005 (v.0) BAN23 Introduction to Finance Principles or any previous version

OR

FNCE2006 (v.0) BAN25 Business Analysis for Investment or any previous version )

AND

(FNCE3001 (v.0) Introduction to Financial Instruments and Markets or any previous version

OR

8127 (v.0) Advanced Calculus 201 or any previous version

OR

MATH2009 (v.0) Calculus 2 or any previous version

OR

12960 (v.0) Finance Instruments and Markets 300 or any previous version

OR

B-ACTUAR (v.0) Bachelor of Science (Actuarial Science) or any previous version

OR

FNCE3006 (v.0) BAN2 4 Introduction to Financial Instruments and Markets or any previous version )

Acknowledgement of Country

Curtin University acknowledges Aboriginal and Torres Strait Islander people, the First Peoples of this place we call Australia, and recognise them for caring for Country for more than 6 0 ,0 0 0 years. We are honoured and grateful for the privilege to maintain campuses operating in Boorloo (Perth) and Karlkurla (Kalgoorlie) in Australia. We pay our respects to Elders past and present as Custodians and Owners of these lands. We recognise their deep knowledge and their cultural, spiritual and educational practices, and aspire to learn and teach in partnership with them. Curtin also acknowledges First Nations peoples connected with our global campuses. We are committed to working in partnership with all Custodians and Owners to strengthen and embed First Nations' voices and perspectives in our decision-making, now and into the future.

Syllabus

This unit covers the theoretical foundations of derivative securities, fi nancial forwards and futures, forward rate agreements (FRAs) and swaps, model-independent option valuation, geometric Brownian motion, Black-Scholes-Merton model, binomial model, option Greeks, and model risk. This unit also discusses the impact of quantum Fintech on derivatives market. This unit includes analyzing a business case study and use Eikon real derivatives market data to solve work integrated problems.

Introduction

Welcome to INE3 0 0 0 Introduction to derivative securities. The aim of the course is to provide students a clearer understating of theory and practice managing derivative securities, and the foundations necessary to pursue academic research or fi nancial market careers in derivatives.

Unit Learning Outcomes

Curtin University's six Graduate Capabilities indicate to employers that graduates possess discipline knowledge and valuable skills. Each course unit addresses these capabilities through specifi c learning outcomes, which outline what students need to know and do to succeed. Assessments are designed to test these outcomes, ensuring that upon completion, students have met all learning objectives.

Your course has been designed so that on graduating you will have achieved all of Curtin's Graduate Capabilities through the assurance of the learning process in each unit.

Learning Activities

All students in this unit should participate in the weekly learning activities. You will be expected to engage this unit in the following ways:

Attend lectures and read the textbook to understand the concepts.

Attempt questions for your weekly tutorials.

Research and read articles/materials pertaining to derivative securities.

Ask questions!

LECTURES

It is recommended that students commit to a structured learning process to promote and reinforce deep learning.

For example:

Complete

pre-reading (text chapters, lecture slides) and attend lectures, to familiarise yourself with the material and to identify shortfalls in understanding. Start with the textbook, attend lectures (if needed listen to ilecture multiple times), together they will direct you to what is important.

Attend

the lectures, take additional notes to clarify key concepts and to eliminate shortfalls in understanding. I encourage you to ask questions in the discussion board if more clarifi cation is required.

Review

the lecture material later the same day. Identify any outstanding diffi culties, and try to obtain answers from other sources (e.g. other textbooks, etc.). If not resolved, please post questions on the discussion board.

Seek

clarifi cation on any issues you do not fully understand in the course material. In the event that there are still shortfalls in your understanding at the end of this process, ask the lecturer during consultation time with specifi c questions. Make sure you are prepared well, as lecturers do not give answers per se, they help you to discover the answers yourself.

TUTORIALS

Active participation is expected from students during tutorials. Participation includes, but is not limited to:

Asking and/or answering questions;

Attempting tutorial questions prior to tutorial class and being ready to discuss materials in class; and

Demonstrating that you have read lecture slides, relevant text chapters, etc.

Attend the tutorial and participate actively (hence attempt all tutorial questions prior to looking at answers, struggling with how to choose between alternatives is part of the learning process. Capitulating after minimal or no eff ort to the answers is not the way to learn).

Tutorials are your forum for informal feedback on your progress in the unit, as well as the primary means of solving issues as soon as they arise. The success of the tutorial process is in the hands of the students. A lack of engagement by students means a lost opportunity to improve your performance which is diffi cult to make up elsewhere.