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FINC 6300 - 24993 Fall 2013

Course Number FINC 6300 - 24993
Course Title Selected Topics in Finance
Location Online
Prerequisites FINC 6352, which may be taken concurrently
Instructor Alex Aidov
Office
Office Hours Virtual Office: Mon 5:00 PM-6:00 PM........ Sugar Land: Mon 6:00 PM-7:00 PM.......... Cinco Ranch/Victoria Wed 6:00 PM-7:00 PM Or by appointment
Phone n/a
Fax
Email AidovA@uhv.edu
Faculty Homepage/URL http://

Prerequisite Policy

Prerequisites for a course exist because the School of Business Administration faculty have determined that the knowledge, skills, and/or exposure students receive through the prerequisites is critical to their success in the course and their ability to contribute to their fellow students' learning experience. In addition, taking your core courses and concentration or elective courses in a prescribed sequence prepares you to integrate the knowledge and skills you are acquiring properly. Students bear the responsibility for verifying that they have the appropriate prerequisites for their courses. Students who enroll in a course without completing the prerequisites risk being dropped from the class at any time during the semester should their lack of prerequisites come to light. In addition, students who enroll without the prerequisites and as a result find themselves at a disadvantage in meeting course objectives will have no redress with the instructor.

Course Description

 

Over the last 30 years the market for derivatives has grown enormously. Today, derivatives are one of the most important tools of modern finance, from both the practical and the academic standpoint. This course is designed to introduce students to the practical and theoretical aspects of derivative instruments, particularly futures and options. The aim of this course is to study the basic principles about how futures and options function, how and why they are used, and how they are valued. The first part of the course will provide a primer on futures markets. Topics include the mechanics of futures markets, hedging strategies using futures, and interest rate futures contracts. The second part of the course, examines options markets. Topics include the mechanics of options markets, trading strategies involving options, and pricing options using binomial trees and the Black-Scholes-Merton model. Throughout the course, the use of derivatives in financial risk management is also emphasized. At the end of the course you will be able to discuss and understand the institutional aspects, strategies, and pricing of derivative markets.

Textbook Information

Hull, Options, Futures, and Other Derivatives, 8 ed., Prentice Hall, ISBN 978-0132777421(Required)

Hull, Student Solutions Manual for Options, Futures, and Other Derivatives, 8 ed., Prentice Hall, ISBN 978-0132164962(Recommended)

Information on Buying Textbooks

The Victoria College Bookstore carries textbooks for all UHV SBA courses.

Students may use the publishing information posted above to order their textbooks from their favorite book vendor. However, before doing so you should find out what your vendor's anticipated shipping time is, and what their return policy is. Also, you should not write in or remove shrinkwrap from any textbook or materials you purchase from any vendor until the first class day in the event that:

  • the vendor supplies you with the wrong edition of your text,
  • the course instructor is forced to make a late change to the required textbooks,
  • you are forced to make a last-minute change to your schedule due to missing prerequisites, or
  • your course is canceled due to low enrollment.

In addition, be aware that, on occasion, certain outside vendors may substitute an international version of a textbook for the version you have requested without notice. International versions of textbooks may be quite different from the editions we require.

Required Course Materials

A working knowledge of excel is a requirement for the course. The mini projects will require the use of a spreadsheet program. A calculator is required for the problem solving portions of this course.

AACSB Accreditation Standards

The School of Business Administration is accredited by AACSB International, the hallmark of excellence in management education. AACSB International accreditation represents the highest standard of achievement for business schools worldwide. Institutions that earn accreditation confirm their commitment to quality and continuous improvement through a rigorous and comprehensive peer review. AACSB International accreditation is the hallmark of excellence in management education. AACSB International accreditation adds value to your degree. The AACSB International accreditation standards require you to:

  • Operate with integrity in your dealings with faculty and other students.
  • Engage the learning materials with appropriate attention and dedication. (This standard recognizes the role students play in the creation of high-quality education. You cannot be passive, nor can your participation be superficial.)
  • Maintain your engagement when challenged by difficult learning activities.
  • Contribute to the learning of others. (Regardless of the delivery mode of the program, students should have opportunities to work together on some learning tasks. Students need to acknowledge their responsibilities to their fellow students by actively participating in group learning experiences.)
  • Perform to standards set by faculty.

Course Objectives

As a result of this course, students will:

  1. Recognize the different types of derivatives traders.
  2. Comprehend the specifications and characteristics of futures and forward contracts.
  3. Identify how futures are used to hedge risk.
  4. Understand how to price different categories of futures contracts.
  5. Comprehend the mechanics of options.
  6. Apply binomial trees and the Black-Scholes-Merton model to price options.
  7. Analyze how the Greeks are used in options trading.
  8. Evaluate the Value at Risk measure.
  9. Interpret the lessons from past derivatives mishaps.

Course Evaluation Process

Grading Scale:

Your letter grade is determined using the grade distribution that follows. You can calculate your percentage grade at any time in the semester by dividing the points you have accrued by the total points available up to that point. This percentage is then matched to a letter grade.

A 90% or higher
B 80 to 89%
C 70 to 79%
D 60 to 69%
F Less than 60%

Course Assessments:

Discussion Board Participation20 %
Quizzes20 %
Mini Projects20 %
Midterm Exam20 %
Final Exam20 %

Discussion Board Participation

Each student is expected to actively participate in discussing the issues raised in the weekly discussion board bulletin. At a minimum, you should post one response to the issues raised by the instructor over the course of a week. Generally, student posts should be direct responses to the discussion topic or thoughtful responses to postings by other students. Thoughtful, substantive input is given more weight than quantity. Discussion Board Participation grades for the semester will be posted at the conclusion of the semester. Your participation will be evaluated based on your responses to the discussion board questions. Discussion board postings will be graded on both quantity and quality. (Assessing learning objectives 1-9)

Quizzes

An excellent method to determine if the concepts have been mastered is the use of quizzes. Quizzes allow students to assess their mastery of critical knowledge and to measure their ability to solve problems requiring the use of several concepts. In addition, since exams are similar to the quizzes, doing them provides the best way to prepare for the exams. In order to prepare for the quizzes, be sure to read the assigned chapter(s) and solve the assigned chapter problems. (Assessing learning objectives 1-8)

Mini Projects

Two mini projects will be assigned during the semester. The projects will allow for further exploration of topics covered in class. The projects will require working with data in excel and a report. (Assessing learning objectives 1,2,3,5,6,7)

Midterm Exam

The midterm exam will consist of multiple choice questions. The exam will cover chapters 1, 2, 3, 4, 5, and 6. A make-up exam will be granted at the instructors discretion. Be prepared to provide documentation to support your request for a make-up exam. The exam is to be your work and your work alone, with no assistance from others. (Assessing learning objectives 1-4)

Final Exam

The final exam will consist of multiple choice questions. The exam will cover chapters 9, 10, 11, 12, 14, 18, and 21. A make-up exams will be granted at the instructors discretion. Be prepared to provide documentation to support your request for a make-up exam. The exam is to be your work and your work alone, with no assistance from others. (Assessing learning objectives 5-8)

Reading Assessments

Your capacity to contribute to class discussions is directly related to your commitment to completing all reading assignments by the dates listed on the course schedule. Class participation grades will reflect both the quantity and the quality of your participation.

Makeup Exams

Make-up exams will only be given at the discretion of the instructor. Students are strongly cautioned to notify the instructor immediately if legitimate and insurmountable obstacles prevent them from participating in a scheduled exam session.

Late Assignments

The due dates for all assignments will be strictly followed. Late assignments may or may not be accepted at the instructor’s discretion; should the instructor accept a late assignment, he or she may reduce the grade of the assignment the equivalent of one (1) letter grade for each day the assignment is late.

Attendance Policy

According to the UHV Student Handbook, students are expected to be diligent in their studies and regular in class attendance. A student whose absences are determined by the instructor to be excessive shall be dropped prior to the last day to drop a course or withdraw from UHV with a grade of W or F. For students enrolled in online courses, "absence" connotes a failure to engage in class participation activities on a weekly basis. If an unforeseen crisis (including family emergencies, professional obligations, and technical difficulties) prevents you from fulfilling your course obligations, you are responsible for alerting your instructor to the reason for and anticipate duration of your absence.

Teaching and Learning Partnership

Teaching and learning is a partnership between faculty and students. I will fulfill my partnership obligations by serving as advisor, consultant, mentor and purveyor of general comments and clarifications of difficult or confusing concepts. To this end, I will respond to questions within 72 hours.  You will fulfill your partnership obligations by being a fully participative, responsive, helping, and working team member of the class.  You should check your UHV email frequently and respond to faculty in a timely fashion. Good business and professional etiquette is expected. No derogatory comments should be made. You may certainly disagree with others in class discussions, and you may state your disagreement (if you choose to); however, please do so in a polite manner.

Homework, take-home exams, case assignments and bulletin board participation all play an important role in your education in this course. They are an essential part of the learning process in that they require the synthesis and extension of concepts. They also help both the student and the instructor to evaluate one’s progress in mastering the material. Past experience indicates that generally the course material cannot be adequately mastered without active involvement on your part.

Discussion of homework assignments with others who are also struggling with them can be highly beneficial and is encouraged. Most real-life problems are solved through team efforts, and it is important to learn how to solve problems cooperatively. The interaction with others working on the same problem often reveals different approaches to common difficulties.

Academic Honesty

Each student is responsible for maintaining high standards of academic honesty and ethical behavior. In order that each student understands what is (or is not) acceptable behavior, the following guidelines are offered.

  • Discussion of assignments with other students and members of the faculty is both permitted and encouraged as a constructive educational practice.
  • Students are expected to write their exams, quizzes and papers on their own, based on their individual level of progress with the material.
  • Copying of another’s work and representing it as one’s own work is a serious academic offense, and will be treated as such.
  • Students are encouraged to review materials other than those required for the course in preparing assignments, but should always properly cite any sources used in assignment preparation.

UHV’s Student Handbook contains a detailed description of the university’s Academic Honesty Policy. In addition, tutors at the Academic Center (see section below) are available to assist you in providing proper citations for your source materials.

Disabled Student Policy

The University of Houston System complies with Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, pertaining to the provision of reasonable academic adjustments/auxiliary aids for students with a disability. In accordance with Section 504 and ADA guidelines, each University within the System strives to provide reasonable academic adjustments/auxiliary aids to students who request and require them. If you believe that you have a disability requiring academic adjustments/auxiliary aids, please contact your University’s student disability services center. University of Houston–Victoria, Office of Disability Services, 3007 N. Ben Wilson St., Suite 133-B University West, Victoria, TX 77901. Office phone – 361-570-4287; E-mail worleyc@uhv.edu; Website - www.uhv.edu/DisabilityServices

Student Absences on Religious Holidays

Per Texas state law, students will be excused from attending class and other required activities, including examinations, for the observance of a religious holy day, including travel for that purpose. A student whose absence is excused on these grounds will be allowed to take an examination or complete an assignment within one (1) week of the excused absence.

Sexual Harassment

Students who feel they are the victims of sexual harassment may contact the Associate Vice President for Student Affairs at 361-570-4290 and/or the Director of Human Resources/Affirmative Action at 361-570-4800.

Grievance Procedures

Students who have non-academic grievances or complaints may contact Student Services at 361-485-4409.

Student Success Center Services

The Student Success Center offers writing assistance to all UHV students in the form of paper reviews by peer tutors. Tutors will aid students in looking more critically at their own writing to examine issues such as organization, structure, and development of ideas. To submit a document for online tutoring, or to schedule an appointment for face-to-face tutoring, please visit the Student Success Center online http://uhv.mywconline.com/. For more information about the Student Success Center and its library of online resources, visit the Center's Web site at http://www.uhv.edu/ac or stop by Suite 129 (University West in Victoria).