BUU44650 Derivatives

(5 ECTS) 

Lecturer:

Dr Ruchira Sharma

Email: sharmaru@tcd.ie 
Office Hours: By appointment, please email to arrange

Pre-Requisite:

BUU22550 - Introduction to Finance

Available to Exchange students 

Module Description

Derivatives have become extremely popular investment tools over the past 30 years, as they allow investors to tailor the amount and type of risk they take, be it risk associated with changes in interest rates, exchange rates, stock prices, commodity prices, inflation and so on. They are used by institutions as well as investors, sometimes to hedge unwanted risks and sometimes to take on additional risk motivated by views regarding future market movements. This module examines the primary types of derivatives (forwards, futures, options and swaps), shows how they are used to achieve various hedging and speculating objectives, outlines a framework for pricing derivatives and studies some applications of derivative-pricing techniques outside derivative markets. The objective is to provide a good grounding in techniques and approaches for the measurement and management of financial risks.

Learning and Teaching Approach

This module is structured around a series of lectures and tutorials. Lecture slides will be provided in advance of lectures. Students will be provided with practice questions and solutions will be discussed in tutorials.

Learning Outcomes

Having completed this module, you should be able to:

• Provide an understanding of derivatives and introduce the analytics of derivative valuation.
• Demonstrate how to value forward, futures, swaps and options.
• Describe and appraise how derivatives can be used to achieve various hedging and speculative strategies.
• Discuss various types of derivatives such as options on stock indices and currencies, futures options and exotic options.
• Evaluate previous derivative mishaps and what we can learn from them.

Textbook and Readings

Hull, J. (2017), Fundamentals of Futures and Options Markets, Eighth Edition, Pearson Education Limited

Reference will be made to additional material throughout the course. Please refer to Blackboard for details.

Course Communication

Lecture slides, tutorial solutions, relevant journal articles, assessment descriptions, announcements and term results will be posted on Blackboard.

Please note that all course related email communication must be sent from your official TCD email address. Emails sent from other addresses will not be attended to.

Assessment:

Assessment for this course will be as follows:

1. Derivatives Mid-Term Examination (Individual): 20%
2. Final Examination (Individual): 80%.

Biographical Note

Ruchira Sharma has worked in and taught at universities in the US, Singapore, and Ireland. Ruchira earned her BA (Hons) in Economics (with a minor in Mathematics) from Lady Shri Ram College in the University of Delhi, India. After that, Ruchira earned her MBA (concentration in Finance and International Business) and PhD (Finance with a minor in Econometrics) from the Katz Graduate School of Business, University of Pittsburgh, Pennsylvania, USA. Outside Ireland, she has taught at the University of Pittsburgh, Pennsylvania State University, and the National University of Singapore. From 1998 until 2022, Ruchira worked at Dublin City University teaching/supervising on the MBA programme, specialist programmes in Finance and actuarial maths, undergraduate programmes as well as in Executive Education. Ruchira was also programme chair of three different MSc Finance programmes at various times. Since 2022, Ruchira has been an adjunct lecturer at Smurfit Graduate School of Business (University College Dublin) and Maynooth University. Ruchira’s main area of teaching has focused on Corporate Finance, Risk Management, Financial Engineering, and Securities and Investments. Ruchira’s main research interests are in foreign exchange risk, initial public offerings, and mergers and acquisitions.