COURSE UNIT TITLE

: DERIVATIVE MARKETS

DEGREE PROGRAMMES

Description of Individual Course Units

Course Unit Code Course Unit Title Type Of Course D U L ECTS
EFE 7021 DERIVATIVE MARKETS ELECTIVE 3 0 0 10

Offered By

Master`s Degree in Financial Economics (Non-Thesis-Evening)

Level of Course Unit

Second Cycle Programmes (Master's Degree)

Course Coordinator

PROFESSOR DOCTOR SAADET KASMAN

Offered to

Master`s Degree in Financial Economics (Non-Thesis-Evening)

Course Objective

The objective of this course to foster an understanding of derivatives particularly, forwards, futures, options, swaps, collateralized debt obligations and credit default swaps. This is achieved through an introduction of the basic techniques of pricing and trading. The course also focuses on the usage of these instruments for speculation and risk management.

Learning Outcomes of the Course Unit

1   Distinguish between call and put options and apply their use in investment management.
2   Compute option maximum gain, maximum loss, and breakeven on various option positions.
3   Describe forwards, futures, swaps and options, and be able to use futures and forwards contracts in order to form hedging strategies
4   Critically evaluate the conceptual aspects of swaps and apply the use in various financial scenarios.
5   Characterize the various aspects of credit derivative products and determine their appropriateness in a variety of corporate and investment scenarios

Mode of Delivery

Face -to- Face

Prerequisites and Co-requisites

None

Recomended Optional Programme Components

None

Course Contents

Week Subject Description
1 Introduction (Financial markets and instruments)
2 Futures and Forwards: Mechanics of future markets
3 Futures and Forwards: Hedging strategies using futures
4 Futures and Forwards: Determination of forward and futures prices
5 Interest rate derivatives: Interest rate forwards and futures
6 Interest rate derivatives: Swaps
7 Midterm
8 Options: Mechanics of options market
9 Options: Properties of stock options
10 Options: Trading strategies involving options
11 Other Derivatives: Credit derivatives
12 Other Derivatives: Exotic options
13 Other Derivatives: Weather, energy and insurance derivatives
14 Final Exam

Recomended or Required Reading

John Hull [H] (2011): Options, Futures and other Derivatives. 8th Edition, Prentice
Hall. ISBN: 0132164949

Planned Learning Activities and Teaching Methods

1. Lectures
2. Class Discussions
3. Assignments

Assessment Methods

SORTING NUMBER SHORT CODE LONG CODE FORMULA
1 MTE MIDTERM EXAM
2 STT TERM WORK (SEMESTER)
3 FIN FINAL EXAM
4 FCG FINAL COURSE GRADE MTE * 0.30 + STT * 0.30 + FIN* 0.40
5 RST RESIT
6 FCGR FINAL COURSE GRADE (RESIT) MTE * 0.30 + STT * 0.30 + RST* 0.40


Further Notes About Assessment Methods

None

Assessment Criteria

1.The students will describe the different types of risks that organizations and individuals encounter
2. The students will define the mechanics of forwards, futures, swaps and options.
3. The students will adapt theoretical concepts to hedging strategies by using futures and forwards.
4. The students will design a swap in the absence or presence of a financial intermediary
5. The students will design strategy which incorporates the use of call and put options

Language of Instruction

English

Course Policies and Rules

It is obligatory to attend at least 70% of the classes.

Contact Details for the Lecturer(s)

To be announced.

Office Hours

To be announced.

Work Placement(s)

None

Workload Calculation

Activities Number Time (hours) Total Work Load (hours)
Lectures 12 3 36
Preparations before/after weekly lectures 12 5 60
Preparation for midterm exam 1 40 40
Preparation for final exam 1 40 40
Preparing assignments 1 70 70
Final 1 2 2
Midterm 1 2 2
TOTAL WORKLOAD (hours) 250

Contribution of Learning Outcomes to Programme Outcomes

PO/LOPO.1PO.2PO.3PO.4PO.5PO.6PO.7PO.8PO.9PO.10
LO.154555
LO.2555455
LO.35455
LO.4445
LO.555535453

CONTACT INFORMATION
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Phone: +90(232) 412 12 12 - Fax: +90 (232) 464 81 35

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