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MBA 642 Financial Derivatives
Adeinat, Iman M.


Mission Statement: Park University provides access to a quality higher education experience that prepares a diverse community of learners to think critically, communicate effectively, demonstrate a global perspective and engage in lifelong learning and service to others.

Vision Statement: Park University, a pioneering institution of higher learning since 1875, will provide leadership in quality, innovative education for a diversity of learners who will excel in their professional and personal service to the global community.

Course

MBA 642 Financial Derivatives

Semester

S1P 2013 DL

Faculty

Adeinat, Iman M.

Title

Adjunct Faculty

Degrees/Certificates

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

Office Location

Kansas City, MO

Office Hours

9 am to 7 pm CST

E-Mail

Iman.Adeinat@park.edu

Class Days

TBA

Class Time

TBA

Prerequisites

MBA 615 and MBA 640. (Formerly FI 642)

Credit Hours

3


Textbook:

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.

Learning Outcomes:
  Core Learning Outcomes

  1. Analyze and differentiate the different types of derivatives such as forward contracts, futures contracts, swaps, and options.
  2. Identify the participants and basic mechanics of derivatives markets.
  3. Apply basic financial principles to compute the price or the price range of the derivatives.
  4. Evaluate key properties of the prices for these derivatives.
  5. Design optimal hedging strategies to manage investment risks using derivatives.


Core Assessment:

Class Assessment:

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.

Assignments

In Weeks 1-7 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.

Quizzes

In Weeks 1-3 and 5-7 there will be a quiz. Each quiz will consist of 15 questions and will be automatically graded by eCollege. Students have 2 hours to must complete the quiz by midnight Sunday CT. Your score will be available in the Gradebook the following Monday.

Exams

There will be a Midterm Exam and a Final Exam. Each exam is worth 200 points. Both exams are divided into two parts that contain short essay questions and short numerical problems. The exams will stress the most important material covered in class. Part I. Short Questions: Students are required to organize their answers so that it is short but to the point.

Part II. Numerical Problems: Students are required to show steps/formulas/solutions to obtain credit, unless stated otherwise. That is, the instructor needs to be able to follow how students get the answer; students cannot simply tell the instructor that the answer is generated by computer.

Students are required to show their work and to submit their exam by Sunday midnight to the appropriate dropbox each week.

Final Project

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

Grading:

Point Distribution and Grading Scale

Activity

Points

Class Participation/Discussion Questions (15 points each x 8)

120

Homework Assignments (25 points each x 7)

175

Quizzes (25 points each x 6)

150

Mid-term Exam

200

Final Exam

200

Final Term Project

155

Total

1000

Grading Scale

Letter Grade

Percent

Points

A

90-100%

900-1000

B

80-89%

800-899

C

70-79%

700-799

D

60-69%

600-699

F

Below 60%

Below 600

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. 
  
 

Week

Topic

Chapter(s)

Exams/Assignments/Projects

1

Introduction

Mechanics of futures market

1, 2

Quiz1

Homework 1

2

Determination of Forward and Futures Prices

Swaps

5, 7

Quiz 2

Homework 2

3

Mechanics of Options Markets

Properties of Stock Options

9, 10

Quiz 3

Homework 3

4

Trading Strategies Involving Options

11

Homework 4

Midterm – Ch. 1, 2, 5, 7, 9, 10

5

Introduction to Binomial Trees

Valuing Stock Options: The Black-Scholes-Merton Model

12, 13

Quiz 4

Homework 5

6

Employee Stock Options

Volatility Smile

14, 19

Quiz 5

Homework 6

7

Greek Letters
Weather, Energy, and Insurance Derivatives

17, 24

Quiz 6

Homework 7

8

-

-

Project
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:

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: http://www.park.edu/disability .

Copyright:

This material is protected by copyright
                               and can not be reused without author permission.

Last Updated:12/24/2012 10:24:55 AM