MBA642 Financial Derivatives

for F1P 2012

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MBA 642 Financial Derivatives


F1P 2012 DL


Adeinat, Iman M.


Adjunct Faculty


PhD, University of New Orleans
MS, University of New Orleans

Office Location

Kansas City, MO

Office Hours

9 am to 7 pm CST


Class Days


Class Time



MBA 615 and MBA 640. (Formerly FI 642)

Credit Hours



Hull, John (2011). Fundamentals of Futures and Options Markets (7th Edition).
Prentice Hall. ISBN 13: 978-0-13-610322-6

Textbooks can be purchased through the MBS bookstore

Additional Resources:
A subscription to the Wall Street Journal is recommended, since many articles appearing in Wall Street Journal are strongly related to the course materials.


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Course Description:
MBA 642 Financial Derivatives: This course provides the student with the necessary skills to value and to use options, futures, and related financial contracts. The financial derivatives are one of the constantly chancing and widely used instruments in todays financial markets. This course will provide rigorous fundamental valuation and explore the strategic and tactical dimensions of derivatives. The topics that will be covered include the valuation of futures contracts on stock indices, on commodities and Treasury instruments; the valuation of options; empirical evidence; strategies with respect to these assets; dynamic asset allocation strategies, of which portfolio insurance is an example; swaps; and the use (and misuse) of derivatives in the context of corporate applications. Prerequisites: MBA 615 and MBA 640. (Formerly FI 642)

Educational Philosophy:

1. Create a desire in the students to continue learning after the course is completed.

2. Motivate the students to pursue their lifelong educational opportunities.

3. Provide an environment that enhances and supports the student’s learning skills.

Core Assessment:

Class Assessment:
Your grade will be determined by:

Discussion Questions:

Students are to select two discussion questions from those provided each week and provide thoughtful answers and post their response by midnight Thursday. In addition the students have to comment on at least two original postings from another student by midnight Sunday.


Each week students are required to complete an individual assignment. The assignment will consist of selected problems from your textbook. Students are required to show their work and to submit their assignment to the appropriate dropbox each week.


There will be a midterm exam and a final exam. All exams contain mainly short essay questions and short numerical problems. The exams will stress the most important material covered in class.

Final Term Project:

There will be a final term project that involves collecting information from Internet, analyzing the information, and performing some computations using Excel.


Final grade will be determined as follows:



Class Participation/Discussion Questions


Homework Assignments




Mid-term Exam


Final Exam


Final Term Project




Final Letter Grades
A  =  90-100%
B  =  80-89%
C  =  70-79%
D  =  60-69%
F  =  below 60%   

Late Submission of Course Materials:
Points will be deducted for late assignments. Late assignment will be penalized at the rate of 10% per day, unless a plausible and documented excuse is presented.

In addition, unless there is a reason beyond your control, e.g. automobile accident, medical excuse, you are expected to take the exam with the rest of the class. If you are not going to meet the due date, you must notify me before the scheduled exam time if you wish to be eligible for a make-up and you must you present a documented proof (e.g. a doctor’s/hospital note) for your absence. If you are eligible for a make-up exam, it will be rescheduled.

Classroom Rules of Conduct:
During classroom discussions please treat other students with courtesy, civility and respect. Please allocate sufficient time for this class during the semester. Keeping track of the course schedule and sticking to it are very important.

Course Topic/Dates/Assignments:

This Course outlines a general guideline. Deviation may be necessary. Students are responsible for all announcements posted on eCompanion Course site. 







Mechanics of futures market

1, 2


Homework  1


Determination of Forward and Futures Prices


5, 7

Quiz 2

Homework  2


Mechanics of Options Markets

Properties of Stock Options 

9, 10

Quiz 3

Homework  3


Trading Strategies Involving Options


Homework  4

Midterm – Ch.  1, 2, 5, 7, 9, 10


Introduction to Binomial Trees

Valuing Stock Options: The Black-Scholes-Merton Model

12, 13

Quiz 4

Homework  5


Employee Stock Options

Volatility Smile

14, 19

Quiz 5

Homework  6


Greek Letters
Weather, Energy, and Insurance Derivatives

17, 24

Quiz 6

Homework  7




Final Exam  – Ch. 11, 12, 13, 14, 17, 19, 24

Academic Honesty:
As a learning community, the University upholds the highest standards of academic integrity in all its academic activities, by faculty, staff, administrators and students. Academic integrity involves much more than respecting intellectual property rights. It lies at the heart of learning, creativity, and the core values of the University. Those who learn, teach, write, publish, present, or exhibit creative works are advised to familiarize themselves with the requirements of academic integrity and make every effort to avoid possible offenses against it, knowingly or unknowingly. Park University 2012-2013 Graduate Catalog Page 21-22


Plagiarism is the appropriation of another person's ideas, interpretation, words (even a few), data, statements, illustration or creative work and their presentation as one's own. An offense against plagiarism constitutes a serious academic misconduct.  Although offenses against academic integrity can manifest themselves in various ways, the most common forms of offenses are plagiarism and cheating. Plagiarism goes beyond the copying of an entire article. It may include, but is not limited to: copying a section of an article or a chapter from a book, reproduction of an art work, illustration, cartoon, photograph and the like and passing them off as one's own. Copying from the Internet is no less serious an offense than copying from a book or printed article, even when the material is not copyrighted.

Plagiarism also includes borrowing ideas and phrases from, or paraphrasing, someone else's work, published or unpublished, without acknowledging and documenting the source. Acknowledging and documenting the source of an idea or phrase, at the point where it is utilized, is necessary even when the idea or phrase is taken from a speech or conversation with another person.

Park University 2011-2012 Graduate Catalog Page 21

Attendance Policy:

Students must participate in an academically related activity on a weekly basis in order to be marked present in an online class. Examples of academically-related activities include but are not limited to: contributing to an online discussion, completing a quiz or exam, completing an assignment, initiating contact with a faculty member to ask a course related question, or using any of the learning management system tools. Park University 2012-2013 Graduate Catalog Page 26

Disability Guidelines:
Park University is committed to meeting the needs of all students that meet the criteria for special assistance. These guidelines are designed to supply directions to students concerning the information necessary to accomplish this goal. It is Park University's policy to comply fully with federal and state law, including Section 504 of the Rehabilitation Act of 1973 and the Americans with Disabilities Act of 1990, regarding students with disabilities. In the case of any inconsistency between these guidelines and federal and/or state law, the provisions of the law will apply. Additional information concerning Park University's policies and procedures related to disability can be found on the Park University web page: .


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Last Updated:7/30/2012 10:23:06 PM