ARVI Syllabus for FIN4486 RVE 1218 PDF

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Syllabus for FIN4486 RVE 1218

8/26/21, 11 :13 PM

Course Syllabus

FIN 4486: Financial Risk Management

Instructor: Professor Leonard Arvi Office: Online Office Hours: By appointment Email: Please use Canvas course message

Course Description and Purpose This course is designed to create an environment within which students learn the basics of financial risk management and how these principles apply to business in the 21st century. This is a difficult topic for many students. Derivatives are often viewed as risky, complicated endeavors, but in reality, they are tremendous, logical, risk management tools when the user is armed with the proper knowledge and skill.

IMPORTANT NOTE You must note that this will be probably a challenging and difficult course given the nature of the course content. Therefore, you must be very diligent in your reading habits. Be prepared to devote at least 1 to 2 hours on this course every day. Ensure that you complete all the assigned quizzes and exams within the prescribed dates. If you are student who thrives in a classroom environment and has difficulty with online course, I recommend that you drop and register for an in-person section of the same course.

Course Objectives After completing FIN 4486, the student should have a broad foundation of knowledge regarding the concept of derivatives and financial risk management, including an understanding of options, forwards, and futures. Upon completion of this course, students will be able to:

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Syllabus for FIN4486 RVE 1218

8/26/21, 11 :13 PM

Define and appropriately use basic concepts and terminology of financial derivatives Be able to discuss the financial instruments available in the futures and options markets Be able to calculate the fair value of the futures and options instruments covered in the class Understand and explain the concepts and usage of hedging techniques Be able to measure and manage the risk in a specific situation, along with the decision-making process which determines what should be done Identify what derivatives strategies exist and how to implement these strategies Explain the advantages and disadvantages of various derivatives strategies Understand and explain the nature of derivatives and the distinction between the various derivative instruments outlined in the course Be able to understand and explain the sensitivity concepts of options pricing.

Major & Curriculum Objectives Targeted Students will be able to: Apply critical thinking skills to complex business problems including: Identifying and examining relevant issues and information Generating and evaluating possible solutions to problems Use quantitative analytical skills to: Identify and analyze material factors that are involved in derivative issues; Determine and apply appropriate problem-solving techniques to risk management and derivatives issues Use information technology as a tool to obtain information concerning financial instruments in the derivatives area

Teaching Methodology This is a fully online course. Self-study is of paramount importance. In this course, all the relevant course materials will be provided online. This includes online lectures, how to use Excel videos, PowerPoint slides, end of the chapter problems, course notes and sample Excel templates will be provided to you. Students are expected to read each chapter thoroughly and post questions on the discussion board for any clarification. Reviewing the PPT slides is not sufficient as the slides cover only the key concepts. It is imperative that you need the textbook chapter, make notes and answer the end of the chapter questions. If you have not read the assigned materials and do not understand the definitions and simple concepts, you will not be able to grasp the more complex topics covered in the later portion of the course. All the quizzes and exams consist of multiple-choice questions. Course delivery will focus on ensuring that students are able to: Calculate profits and losses from trading strategies https://fiu.instructure.com/courses/111531/assignments/syllabus

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Syllabus for FIN4486 RVE 1218

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Read and interpret financial instrument quotations Identify derivative strategies and explain how to execute these strategies Evaluate derivative pricing models and the factors that affect them Integrate an understanding of volatility and other sensitivity measures into the risk management thinking process Identify the elements of a derivative's premium and what influences these components (i.e., intrinsic & time value) Explain, analyze and demonstrate the application of hedging strategies to identified risks

Assurance of Learning (AoL exam) The College of Business cares about the quality of your education. For more information please visit the Assurance of Learning

(http://business.fiu.edu/aol/index.cfm) site to learn more on the College's

commitment to this initiative. There will be AoL exam administered in this course by the College of Business Administration. It is mandatory for all students to complete this exam and the score will be part of the course grade.

Important Information Before starting this course, please review the following pages: Policies Technical Requirements and Skills Accessibility and Accommodation Academic Misconduct Statement

Course Policies Please check this section carefully before you proceed to read the rest of the syllabus: 1. This is a fully online course which provides flexibility within limits. 2. A missed quiz or exam cannot be made up. Note the dates of the assessments and complete them by the due date. 3. If you take a vacation or business trip, you still need to fulfill your responsibilities with regard to assignment (essays or cases) and exam deadlines. 4. Only medical emergencies that requires hospitalization, with documentation, will be accepted for makeups. No other excuses will be entertained. 5. In case you experience technical problems, please contact Online Support directly and explain the problem. If their investigation proves that your technical issues were caused by Canvas, I will be obliged to give you an opportunity to make up the exam or submit your quiz. Please see the proctored exam policy section for any other case. https://fiu.instructure.com/courses/111531/assignments/syllabus

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6. There is NO curve grading or rounding the final average to the next highest decimal, even if it is a minuscule amount. Do not request special concession, extra credit, etc. There is none. 7. Please read the Syllabus carefully, line by line – especially the section where it says "Prepare Your Computer" – and ensure that you submit assignments timely and allow sufficient time to take your exams (do not start your exam at 11:00 pm, or submit your quiz at 11:00 pm). Course delivery will focus on ensuring that students are able to: Present written and verbal communication in a clear and concise manner. Interact with other students and the instructor to demonstrate functional skills, foundational knowledge and application of the theory. Learn how to perform web based research If the student needs any help, please do not hesitate to contact the professor. In case of any conflict, disagreement or extraneous circumstance the professor’s decision is final and non-negotiable. If you do want wish to abide by these terms, please withdraw from this course. By enrolling in this course, you are accepting to all the terms and conditions as stipulated by the professor irrespective of whether listed in this syllabus or not. If you are not sure, please clarify any issue with the professor.

Course Prerequisites This course has a prerequisite(s). Review the course catalog page

(http://catalog.fiu.edu/) for prerequisites

information. It is recommended that you should have completed FIN 3414 Intermediate Financial Management and FIN 4502 Securities Analysis with grade of C of higher.

Proctored Exam Policy Please note that the information contained in this section applies only if your course requires a proctored exam. Through a careful examination of this syllabus, it is the student’s responsibility to determine whether this online course requires proctored exams. Please visit our Student Proctored Exam Instructions (http://online.fiu.edu/currentstudents/exams) webpage for important information concerning proctored exams,

proctoring centers, and important forms.

Textbook and Course Materials Required course materials An Introduction to Derivatives and Risk Management

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Syllabus for FIN4486 RVE 1218

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by Don M. Chance, Robert Brooks 10th edition, 2013 ISBN-13: 978-1-133-19019-6; ISBN-10: 1-133-19019-7 If you are using an older (8th edition) or newer (9th edition) – match the titles of the chapters to chapter listed in the course schedule You may purchase your textbook online at the FIU Bookstore (http://fiu.bncollege.com/webapp/wcs/stores/servlet/BNCBHomePage? storeId=21551&catalogId=10001) .

to Bloomberg terminal on campus at FIU Subscription to StockTrak trading platform

(https://www.stocktrak.com/members/registerstudent?

session=FIN4486RVBB_Fall2021) (14 weeks, $29.95)

Texas Instruments BA-II Plus finance calculator recommended Subscription to the Wall Street Journal

(https://r.wsj.com/PROF2bxb) is recommended

Expectations of this Course This is an online course, meaning that all of the course work will be conducted online. Expectations for performance in an online course are the same as for a traditional course; in fact, online courses require a degree of self-motivation, self-discipline, and technology skills that can make them more demanding for some students. Students must recognize that completing assignments in a timely manner will not only assist in understanding the subject matter but also facilitate orderly progression of the course. Students must commit to absolute academic honesty. The assigned chapter are required reading for each class. Students should have read assigned material prior to class, participate in class discussion and clarify questions. Students are expected to: Review the How to Get Started information located in the course content area. Introduce yourself to the class during the first week by posting a self-introduction in the appropriate discussion forum. Take the practice quiz to ensure that your computer is compatible with Canvas. Interact online with instructor/s and peers and keep up with all assignments. Review and follow the course calendar Respond to discussion boards, blogs and journal postings within 2 business days Respond to emails/messages within 2 business days Submit assignments by the corresponding deadline Check course announcements, messages daily Suggested Study Procedures:

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Read the assigned Chapter in the textbook and review the Concept Check questions and the Self-Test Problems at the end of the chapter. Complete the Quiz for each chapter prior to the deadline, extensions will not be granted. The instructor will under no circumstance make an extension for any missed quiz. Missed quizzes will be given zero points. If the student is unable to complete the assigned quizzes, tests in the specified time, it is recommended that the student drops the course. Self-discipline and adherence to deadline to set deadline is vital for doing well in this course. Post general questions on the Discussion Forum in Canvas and review the forum for previously answered questions. Use Messages in Canvas for communication with the Instructor.

Course Communication Communication in this course will take place using Canvas Messages only. Please follow these instructions when you email https://www.wikihow.com/Email-a-Professor (https://www.wikihow.com/Email-a-Professor)

Unprofessional, improperly written emails will not be answered. It is important that you learn to be a business professional starting by communicating appropriately. This applies to all forms of communication sent using Canvas messages. Sending emails like a text message will not be answered. The message feature is a private, internal Canvas only communication system. Users must log on to the Canvas system to send/receive/read messages. There are no notifications in Canvas to inform users when a new message has been received; therefore, it is recommended that students check their messages routinely to ensure up-to-date communication. This is the best method to communicate with your instructor privately. Visit our writing resources page (https://writingcenter.fiu.edu/) for more information on professional writing and technical communication skills.

StockTrak Trading Project Please see detailed information in StockTrak Trading. It has three components - StockTrak Basics assignment, StockTrak Trading and StockTrak report - all worth 30% of the course grade. Each student will work throughout the semester to trade different financial derivatives in StockTrak (https://www.stocktrak.com/members/registerstudent?className=FIU_4486_Fall2019) . Registration will be open

from August 23 until September 30 . If you fail to register by this deadline, you will automatically lose of all of the StockTrak Basics grade and a third of the StockTrak trading grade. Trading will take place from August 23 to November 26. The particular trading guidelines are given in StockTrak Trading and the majority of your grade (80%) is based on having met these guidelines. This project will allow you to apply what you learn in class in a hands-on way. This is a semester long project and has to be done consistently throughout https://fiu.instructure.com/courses/111531/assignments/syllabus

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the semester. It is imperative that you note the date for registration and start trading. At least two trades per week is expected. Students are expected to start trading from the scheduled first week on wards, each week for the entire 14 week period. Failing to make any trades consistently throughout the semester and making up trades in until the last few weeks of the semester will automatically result in a fail grade for this project.

Discussion Forums Keep in mind that forum discussions are public, and care should be taken when determining what to post. Students are encouraged to post any questions they might regarding the subject material on the discussion board. I actively encourage participation, sharing your knowledge with other students and in studying together to make the most of this course. Students are expected to contribute to a lively discussion on various interesting real world topics/news articles from the Wall Street Journal. From time to time, additional reading material will be placed in the discussion forum. The online participation grades (if any) will be determined by the following criteria: Did you actively participate in class discussions by asking meaningful questions, and contribute to the general understanding of others of the theoretical and practical material under consideration? Did you follow directives as posted in the Discussion forum including meeting all due dates? You must read everything from the Professor. It is advisable that you read ALL postings since if the Professor answers a student's question in the Discussion forum she will not repeat the answer if you ask it again. Student participation in discussions after a topic expires, while appreciated, will not contribute to the grade. Student interaction is an important part of Active Learning and it is encouraged. You should not use these Topic forums for any personal reasons. Review the closing dates of these deliverables closely, as they will not be accepted for credit beyond the dates posted on the discussion forum. Other important material is communicated on the "General Forum" within the Discussion Board.

Quizzes In order to mitigate any issues with your computer and online assessments, it is very important that you take the Practice Quiz (%24CANVAS_OBJECT_REFERENCE%24/quizzes/g3e06891ad035be791ed82820594ac7b5) from each computer you will be using to take your graded quizzes and exams. For quiz duration, grading criteria and feedback response time, please review the important information about quizzes page. Please note assessments in this course are not compatible with mobile devices and should not be taken through a mobile phone or a tablet. If you need further assistance please contact FIU Online Support Services

(http://online.fiu.edu/supportservices) .

There are six quizzes. You have one attempt to complete each quiz. The quiz solution will be made available

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the next day following the last date to take the quiz. Please note that questions from the quizzes might also be in the exam, so it is imperative that you complete the quizzes to do well in the exams. There will be absolutely NO make-up opportunities for quizzes. Quizzes Opening Date

Closing Date

Quiz Name Quiz 1 covers

Sep 7, 6:00am

Sep 7, 11:00pm

Chapter 1 Introduction, Chapter 2 Structure of Options markets Chapter 3 Principles of Option pricing

Quiz 2 covers Sep 21, 6:00am

Sep 21, 11:00pm

Chapter 4 Option Pricing: Binomial Model Chapter 5 Option Pricing: Black-Scholes-Merton

Quiz 3 covers Oct 5, 6:00am

Oct 5, 11:00pm

Chapter 6 Basic Option Strategies Chapter 7 Advanced Option Strategies

Quiz 4 covers Nov 2, 6:00am

Nov 2, 11:00pm

Chapter 8 Structure of forward and futures markets Chapter 9 Principles of pricing forwards, futures and option on futures

Quiz 5 covers Nov 16, 6:00am

Nov 16, 11:00pm

Chapter 10 Futures Arbitrage Strategies Chapter 11 Forward and futures hedging, spread and target strategies

Nov 30, 6:00am

Nov 30, 11:00pm

Quiz 6 covers Chapter 12 Swaps

Follow all assessments dates and times found in the Assessments section of the course calendar. PLEASE NOTE: Since this is fully online course, please make note of the quiz available date & times as wel

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Syllabus for FIN4486 RVE 1218

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the exam availability dates and times. Missing a quiz or an exam will automatically result in a zero grade for that particular quiz/exam. No exceptions will be entertained for missing a quiz/exam. All of the quizzes will be available from 6:00 am until 11:00 pm the scheduled date. (See Course Calendar fo details). Quizzes and exams duration will vary depending on the complexity of the questions Students will be able to see the results after the availability period has ended and all of the questions & answers which will be the next day after the quiz due date. Students have to review the quiz results only on this day. Quiz grade will be available soon after completion of the quiz

Examinations There are two examinations. Both exams are fully online. Exams are not cumulative. Each examination will have multiple choice questions/prob...