Students
AFIN8006 – Risk Management and Derivatives
2026 – Session 1, In person-scheduled-weekday, North Ryde
General Information
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| Unit convenor and teaching staff |
Unit convenor and teaching staff
Unit Convenor
Andrew Lepone
Contact via 9850 9975
E4A - Room 544
Please contact to arrange a time
Lecturer
Chloe Chen
Contact via yi.chen19@mq.edu.au
Please contact to arrange a time
|
|---|---|
| Credit points |
Credit points
10
|
| Prerequisites |
Prerequisites
(Admission to MActPrac or MFin) or ACST6003
|
| Corequisites |
Corequisites
|
| Co-badged status |
Co-badged status
|
| Unit description |
Unit description
This unit examines current techniques for measuring and managing the financial risk faced by corporate and financial institutions, with an emphasis on the practical use of derivative financial products such as forwards, futures, swaps and options to manage risk. |
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: Recognise the role of derivatives in financial risk management.
- ULO2: Discover the fundamental principles of derivatives valuation and its application in managing risks.
- ULO3: Evaluate alternative risk management strategies and tactics.
- ULO4: Encourage peer learning, peer support and collaborative work inimplementing appropriate risk management solutions for corporate risk scenarios.
General Assessment Information
Late Submission Penalties
If you submit your assessment late, 5% of the total possible marks will be deducted for each day (including weekends), up to 7 days. Submissions more than 7 days late will receive a mark of 0.
Example 1 (out of 100):
If you score 85/100 but submit 20 hours late, you will lose 5 marks and receive 80/100.
Example 2 (out of 30):
If you score 27/30 but submit 20 hours late, you will lose 1.5 marks and receive 25.5/30.
Extensions
Automatic short extension: Some assessments are eligible for automatic short extension. You can only apply for an automatic short extension before the due date.
Special Consideration: If you need more time due to serious issues and for any assessments that are not eligible for Short Extension, you must apply for Special Consideration. Need help? Review the Special Consideration page for further details.
Assessment Tasks
| Name | Weighting | Hurdle | Due | Groupwork/Individual | Short Extension | AI Approach |
|---|---|---|---|---|---|---|
| Formal examination | 50% | No | Exam Period | Individual | No | Observed |
| Formal examination: Test | 20% | No | Week 8 | Individual | No | Observed |
| Professional practice: Applied risk management and derivatives | 30% | No | Week 10 | Group | No | Open AI |
Formal examination
Assessment Type 1: Examination
Indicative Time on Task 2: 30 hours
Due: Exam Period
Weighting: 50%
Groupwork/Individual: Individual
Short extension 3: No
AI Approach: Observed
The purpose of this assessment is for you to demonstrate the expertise you have gained in this unit.
You will participate in a 2-hour exam held during the University Examination period. Important information about the exam will be made available on the unit iLearn page. You should also review the MQ Exams website for general tips:
Deliverable(s): Formal exam Individual assessment
On successful completion you will be able to:
- Evaluate alternative risk management strategies and tactics.
- Encourage peer learning, peer support and collaborative work inimplementing appropriate risk management solutions for corporate risk scenarios.
Formal examination: Test
Assessment Type 1: Examination
Indicative Time on Task 2: 15 hours
Due: Week 8
Weighting: 20%
Groupwork/Individual: Individual
Short extension 3: No
AI Approach: Observed
The purpose of this assessment is for you to demonstrate your understanding and knowledge of key topics from the unit.
You will participate in a formal test. Feedback on your performance will help you assess your progress through the unit content.
Deliverable(s): Test Individual assessment
On successful completion you will be able to:
- Recognise the role of derivatives in financial risk management.
- Discover the fundamental principles of derivatives valuation and its application in managing risks.
Professional practice: Applied risk management and derivatives
Assessment Type 1: Professional task
Indicative Time on Task 2: 25 hours
Due: Week 10
Weighting: 30%
Groupwork/Individual: Group
Short extension 3: No
AI Approach: Open AI
The purpose of this assessment is for you to gain expertise in applications in risk management and derivatives.
You will apply frameworks and concepts discussed in the unit to a financial risk management scenario.
Skills in focus:
- Critical thinking and problem solving
- Discipline knowledge
- Collaboration skills
Deliverable(s): Written submission [max 2,500 words] Group assessment
On successful completion you will be able to:
- Discover the fundamental principles of derivatives valuation and its application in managing risks.
- Evaluate alternative risk management strategies and tactics.
- Encourage peer learning, peer support and collaborative work inimplementing appropriate risk management solutions for corporate risk scenarios.
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
- Academic Success 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.
3 An automatic short extension is available for some assessments. Apply through the Service Connect Portal.
Delivery and Resources
DELIVERY FORMAT
Classes comprise a weekly, two-hour lecture plus a one-hour workshop exercise questions. Students should attend all classes, both for learning and assessment purposes.
UNIT READINGS
Lecture Notes & Prescribed Text
PRESCRIBED TEXT
'Option, Futures, and Other Derivatives' (Global Edition) by John C. Hull, 10th Edition, Pearson
Library access link: Risk Management and Derivatives
TECHNOLOGY NEEDS
- Access to the unit Website
- Word processing software for report writing
- Spreadsheets for applying quantitative models studied in the unit
Unit Schedule
UNIT SCHEDULE (Subject to minor change)
| Week | Textbook Chapters | Topic |
|---|---|---|
| 1 | 1,2,3 | Introduction to futures, options and hedging strategies |
| 2 | 5 | Forwards and futures pricing and hedging |
| 3 | 7 | Swaps pricing and construction |
| 4 | 10,11,13 | Options pricing using binomial trees |
| 5 | 14,15 | Options pricing using the Black-Scholes-Merton model |
| 6 | 19,20 | Greek letters and volatility smiles |
| Mid-semester break | ||
| 7 | Mid-session Test | |
| 8 | 22 | Value at risk |
| 9 | 23 | Volatilities, correlations, and dependence |
| 10 | 24 | Credit risk |
| 11 | 35 | Energy and commodity derivatives |
| 12 | 37,8 | Ethical issues in risk management |
| 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.
Student Code of Conduct
Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/admin/other-resources/student-conduct
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 connect.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
Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/
Academic Success
Academic Success provides resources to develop your English language proficiency, academic writing, and communication skills.
- Workshops
- Chat with a WriteWISE peer writing leader
- Access StudyWISE
- Upload an assignment to Studiosity
- Complete the Academic Integrity Module
The Library provides online and face to face support to help you find and use relevant information resources.
Student Services and Support
Macquarie University offers a range of Student Support Services including:
- IT Support
- Accessibility and disability support with study
- Mental health support
- Safety support to respond to bullying, harassment, sexual harassment and sexual assault
- Social support including information about finances, tenancy and legal issues
- Student Advocacy provides independent advice on MQ policies, procedures, and processes
Student Enquiries
Got a question? Ask us via the Service Connect Portal, or contact Service Connect.
IT Help
For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/.
When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.
Unit information based on version 2026.04 of the Handbook