Students
ACST2001 – Financial Modelling
2022 – Session 2, In person-scheduled-weekday, North Ryde
General Information
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| Unit convenor and teaching staff |
Unit convenor and teaching staff
Unit Convenor
Colin Zhang
Deanna Tracy
|
|---|---|
| Credit points |
Credit points
10
|
| Prerequisites |
Prerequisites
50cp at 1000 level or above including [(ACST101 or ACST1001) and (STAT150 or STAT1250 or STAT170 or STAT1170 or STAT171 or STAT1371)]
|
| Corequisites |
Corequisites
|
| Co-badged status |
Co-badged status
|
| Unit description |
Unit description
This unit explores some basic concepts of finance, in particular: price; yield; the relationship between price and yield; interest rate risk; reinvestment risk; duration and its uses; volatility; the contingent payments approach; arbitrage pricing theory; pricing forwards; futures and options. To achieve understanding, this unit uses financial mathematics (the techniques learned in ACST1001 are developed further here) to analyse transactions involving commonly used financial instruments in the context of the markets in which they are traded. At the same time, students develop skills in solving problems; in explaining financial ideas in simple language; in constructing spreadsheet models; and in working as part of a team. A range of assessment tasks are provided, some to generate feedback on how well the understanding and skills are developing, and others to determine the standard of understanding and skills attained. |
Important Academic Dates
Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates
Learning Outcomes
On successful completion of this unit, you will be able to:
- ULO1: Apply the basic concepts and principles of financial analysis into solving financial problems.
- ULO2: Design Excel spreadsheets to solve basic problems in financial analysis.
- ULO3: Appraise the work of others in the field of financial analysis.
- ULO4: Construct a solution to a problem in financial analysis as part of a team.
General Assessment Information
Late Assessment Submission Penalty (written assessments)
Unless a Special Consideration request has been submitted and approved, a 5% penalty (of the total possible mark) will be applied each day a written assessment is not submitted, up until the 7th day (including weekends). After the 7th day, a grade of ‘0’ will be awarded even if the assessment is submitted. Submission time for all written assessments is set at 11.55pm. A 1-hour grace period is provided to students who experience a technical concern.
For any late submissions of time-sensitive tasks, such as scheduled tests/exams, performance assessments/presentations, and/or scheduled practical assessments/labs, students need to submit an application for Special Consideration.
Assessment Tasks
| Name | Weighting | Hurdle | Due |
|---|---|---|---|
| Spreadsheet Project Task | 20% | No | 4/10/22 |
| Take-home Quizzes | 20% | No | 16/8/22 and 11/10/22 |
| Final Exam | 60% | No | University Examination Period |
Spreadsheet Project Task
Assessment Type 1: Quantitative analysis task
Indicative Time on Task 2: 20 hours
Due: 4/10/22
Weighting: 20%
There are two components (an individual task and a group spreadsheet task). You will need to submit the tasks via iLearn.
On successful completion you will be able to:
- Apply the basic concepts and principles of financial analysis into solving financial problems.
- Design Excel spreadsheets to solve basic problems in financial analysis.
- Appraise the work of others in the field of financial analysis.
- Construct a solution to a problem in financial analysis as part of a team.
Take-home Quizzes
Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 20 hours
Due: 16/8/22 and 11/10/22
Weighting: 20%
You will use the quiz links on iLearn to complete two take-home quizzes.
On successful completion you will be able to:
- Apply the basic concepts and principles of financial analysis into solving financial problems.
- Appraise the work of others in the field of financial analysis.
Final Exam
Assessment Type 1: Examination
Indicative Time on Task 2: 28 hours
Due: University Examination Period
Weighting: 60%
The final examination will be a two-hour written paper with ten minutes reading time, to be held during the University Examination period.
On successful completion you will be able to:
- Apply the basic concepts and principles of financial analysis into solving financial problems.
- Design Excel spreadsheets to solve basic problems in financial analysis.
- Appraise the work of others in the field of financial analysis.
- Construct a solution to a problem in financial analysis as part of a team.
1 If you need help with your assignment, please contact:
- the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
- the Writing Centre for academic skills support.
2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation
Delivery and Resources
Reference books
You do NOT have to buy a printed textbook. You may find these books useful as additional references for some topics in ACST2001:
- Knox, D M, Zima, P & Brown, R L (1999) Mathematics of Finance (Second edition), Irwin/McGraw-Hill
- Sherris, M (1996) Money & Capital Markets (Second Edition), Allen & Unwin (available in library only)
- Viney C (2011) Financial Market Essentials, McGraw-Hill
- Valentine, T, Ford, G & Copp, R (2006) Financial Markets & Institutions in Australia, Prentice Hall
The recommended texts are available in the reserve section of Macquarie University Library.
For those wishing useful reference material on using Microsoft Excel, you may wish to buy a SIMnet online account http://mq.simnetonline.com.
Technology Used and Required
Calculators
You may use a calculator in the class tests and at the final exam provided that it is portable, silent and battery operated, but you must show clearly the steps involved in every calculation. In the final exam you may NOT use any calculators that have a text-retrieval capacity, whether or not they have a full alphabet on the keyboard. Calculators may be checked at the commencement of the final exam, and the make/model may be recorded.
Software
Many of the problems you will encounter in this unit can be solved easily with the spreadsheet program, Excel. You can use this spreadsheet program to verify your solutions to many of the problems you are solving. You will need to use Excel to do the Spreadsheet quizzes and the Group Spreadsheet Project. In addition, students in ACST2001 will be given access to the financial industry data platform, FactSet. This can be accessed through a web browser. You will use the data from FactSet to complete a number of the assessment tasks in the unit.
PDF file
You might need to electronically submit your solutions (using iLearn) as PDF files for some of your assessments. Some possibilities to produce these files are: scan your handwritten solutions to a PDF file; use WORD (or similar software) to type out your solutions and save your work as a PDF file. For each assessment you can only submit one PDF file; it must contain all the pages of your solution (so make sure, if your scanner produces separate PDF pages, that you can combine them into one file).
Unit Schedule
| Week | Topic |
|---|---|
| 1 | Simple interest and short-term financial instruments, compound interest and bonds |
| 2–3 | Short-term financial instruments and bond prices |
| 4 | Bond prices, bond yields and zero coupon bonds |
| 5 | Re-investment risk and TRCY |
| 6 | Horizon analysis |
| 7 | Horizon analysis, bond duration |
| Session break | |
| 8 | Bond duration |
| 9-10 | Contingent payments, forward contracts |
| 11 | Forward contracts |
| 12 | Option pricing |
| 13 | Revision |
Policies and Procedures
Macquarie University policies and procedures are accessible from Policy Central (https://policies.mq.edu.au). Students should be aware of the following policies in particular with regard to Learning and Teaching:
- Academic Appeals Policy
- Academic Integrity Policy
- Academic Progression Policy
- Assessment Policy
- Fitness to Practice Procedure
- Assessment Procedure
- Complaints Resolution Procedure for Students and Members of the Public
- Special Consideration Policy
Students seeking more policy resources can visit Student Policies (https://students.mq.edu.au/support/study/policies). It is your one-stop-shop for the key policies you need to know about throughout your undergraduate student journey.
To find other policies relating to Teaching and Learning, visit Policy Central (https://policies.mq.edu.au) and use the search tool.
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Results
Results published on platform other than eStudent, (eg. iLearn, Coursera etc.) or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au or if you are a Global MBA student contact globalmba.support@mq.edu.au
Academic Integrity
At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.
Student Support
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- Workshops
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IT Help
For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/.
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Unit information based on version 2022.05 of the Handbook