MSF 707: Futures, Options, and Other Derivatives Master Syllabus
Course Instructor:
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Course Website: Canvas
The Course Objectives
This course covers selected topics in futures, options, and other derivative instruments. It is designed to expose students to (1) the economic function and institutional characters of futures and options markets, (2) pricing and hedging with futures, forward, swaps, and options contracts on common stocks, indices, interest rates, currencies, and other fundamental financial assets, (3) applying common trading strategies using derivatives, and (4) learning fundamental concepts of risk measures and portfolio management using derivatives.
This course will build a solid foundation for students who are interested in pursuing further study or future careers in the areas of derivatives, portfolio management, or financial risk management. There is a high demand in the job market for financial analysts who are able to understand and apply important concepts of derivatives in financial analyses.
Course Resources and Supporting Items
Required Textbook
- Hull, John C., Fundamentals of Futures and Options Markets, 9th edition, Pearson, 2017.
Optional Textbook and Other Resources
- A calculator is required. Quite often, class lectures will involve working through problems. Thus, you should have your calculator ready before class starts.
- A subscription to the Wall Street Journal is strongly recommended. Other helpful periodicals include Barron’s, Business Week, Bloomberg, and other financial newspapers. During the term, you may be asked to read certain articles in current business periodicals.
- You can sign up to create an individual account and access The WSJ through Mason Libraries
- Students are encouraged to check out financial web sites regularly to keep up with latest financial news. Here are some examples:
Grades
I expect this course to be intellectually demanding. Students are responsible for putting in sufficient time to study the textbook, course notes, and problems. The final grade will be based on:
| Class Participation | 5% |
| Quiz I (50 min) | 20% |
| Quiz II (50 min) | 20% |
| Project I | 10% |
| Project II | 10% |
| Final Exam (Comprehensive) | 35% |
| Final Grade | 100% |
The final exam is scheduled on [ ] (The last week of module 5). Students are not allowed to skip any of the prescheduled quizzes and exams. One exception is that you present a physician’s statement attesting to illness on the day of the exam or for an extraordinary reason.
Students’ final letter grades for the course are determined based on the following: A: 93.0 or greater, A-: 89.0 – 92.9, B+: 86.0 – 88.9, B: 83.0 – 85.9, B-: 80.0 – 82.9, C+: 75.0 – 79.9, C: 70.0 – 74.9, D: 60.0 – 69.9, F: 59.9 or less. The grade thresholds might be lowered based on the overall grade distribution of the entire class.
Homework Problems
I will assign problems for homework. They will not be collected, but part of exams will be taken either directly or slightly modified from them. Thus, it is important that you do homework problems. Just reading and memorizing the answers to the study questions will not prepare you for the exams. You may find their volume too much to handle alone; thus, students might want to work in groups.
Project
There will be two group projects. The details will be handed out later.
Course Outline
| Week | Topics | Readings/Assignments |
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| Week 2 |
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| Week 3 |
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| Week 4 |
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| Week 5 |
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| Week 6 |
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| Week 7 |
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| Week 8 | Final |
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