Assessable learning outcomes:
This module provides an introduction to traded share options.
Additional outcomes:
Outline content:
Introduction to call and put options, covered positions – hedges, spreads, combinations, put-call parity, some reasons for trading options, option valuation – six relevant variables, arbitrage bounds, exact value of a call option before expiry – binomial model, Black-Scholes, other applications of options theory, real options.
Brief description of teaching
and learning methods:
Lectures will be used for the exposition of theory. Classes will be used to discuss non-assessed problem sets.
Contact hours:
Autumn
Spring
Summer
Lectures
5 x 2hrs
1 x 1 hr
Tutorials/seminars
3 x 1 hr
Practicals
Other contact (eg study visits)
Total hours
13
1
Number of essays or assignments
1 test
Other (eg major seminar paper)
Assessment:
Coursework Students are required to sit one multiple-choice test.
Relative percentage of coursework Coursework has a weight of 20% in the final assessment.
Penalties for late submission N/A
Examination One 1-hour unseen written paper. Part 3 Final examinations begin in the third week of the Summer term.
Requirements for a pass A minimum mark of 40%.
Reassessment arrangements Re-examination for Finals takes place in August/September of the same year.
staff
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