Course overview
- Study period
- Semester 2, 2025 (28/07/2025 - 22/11/2025)
- Study level
- Postgraduate Coursework
- Location
- St Lucia
- Attendance mode
- In Person
- Units
- 2
- Administrative campus
- St Lucia
- Coordinating unit
- Business School
Use of swaps and futures to manage interest rate, commodity price and exchange rate risk. Practical application of important risk management principles and tools in a bond trading game.
Corporations now face a far more complex financial environment than they did up to the 1980s when governments exercised significant control over interest rates, foreign exchange rates and commodity markets. Today, the operating performance of a corporation can be severely impacted by movements in interest rates, exchange rates and commodity prices and the risk of these movements must be professionally managed. This course details the nature of these risks, their financial consequences and the tools and derivative products that can be used to manage them such as futures, swaps and options. The course also emphasises the management of interest rate risk, reflecting its relative importance to Australian corporations and government authorities.
The later part of the course involves a 'game' designed by the Queensland Treasury Corporation, where teams of students are required to take on the role of central treasury in the management of a portfolio of fixed interest securities for several small government authorities. The management of interest rate risk associated with the portfolio is the focus of this game.
To prepare students for the game, the first portion of the course details the nature and measurement of interest rate risk, and the financial products that can be employed to manage the risk including interest rate futures and swaps.
Course requirements
Prerequisites
You'll need to complete the following courses before enrolling in this one:
FINM7065 or 7401 or 7805
Restrictions
Quota: Minimum of 15 enrolments
Course contact
Course staff
Lecturer
Mr Alexander Cameron
Timetable
The timetable for this course is available on the UQ Public Timetable.
Additional timetable information
Please note: Teaching staff do not have access to the timetabling system to help with class allocation. Therefore, should you need help with your timetable and/or allocation of classes, please ensure you email business.mytimetable@uq.edu.au from your UQ student email account with the following details:
- Full name
- Student ID
- Course Code
Aims and outcomes
This course aims to provide you with a foundation in the principles and practices of financial risk management with an emphasis on interest rate risk management. You will develop practical skills in risk management through participation, as part of a team, in a trading game where the team will be required to manage various financial risks associated with a portfolio of bonds, and commodity/foreign exchange exposures.
Assessment
Assessment summary
| Category | Assessment task | Weight | Due date |
|---|---|---|---|
| Examination |
Saturday In-Semester Exam
|
25% |
In-semester Saturday 6/09/2025 - 20/09/2025 |
| Paper/ Report/ Annotation, Role play/ Simulation |
Trading Game
|
15% |
Workshop 1 15/10/2025 11:59 pm Workshop 2 22/10/2025 11:59 pm Workshop 3 29/10/2025 11:59 pm |
| Paper/ Report/ Annotation | Individual Assignment | 25% |
31/10/2025 3:00 pm |
| Examination |
End of Semester Examination
|
35% |
End of Semester Exam Period 8/11/2025 - 22/11/2025 |
Assessment details
Saturday In-Semester Exam
- Identity Verified
- In-person
- Mode
- Written
- Category
- Examination
- Weight
- 25%
- Due date
In-semester Saturday
6/09/2025 - 20/09/2025
- Other conditions
- Time limited, Secure.
- Learning outcomes
- L01, L02, L03
Task description
The In-Semester Exam covers material from lectures 1-4 inclusive.
This is in-person, invigilated, paper-based written exam.
More details will be given on the course Blackboard site.
AI Statement:
This assessment task is to be completed in-person. The use of generative Artificial Intelligence (AI) or Machine Translation (MT) tools will not be permitted. Any attempted use of AI or MT may constitute student misconduct under the Student Code of Conduct.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 90 minutes |
| Calculator options | (In person) Casio FX82 series only or UQ approved and labelled calculator |
| Open/closed book | Closed book examination - no written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Deferral or extension
You may be able to defer this exam.
Trading Game
- Team or group-based
- Mode
- Activity/ Performance, Written
- Category
- Paper/ Report/ Annotation, Role play/ Simulation
- Weight
- 15%
- Due date
Workshop 1 15/10/2025 11:59 pm
Workshop 2 22/10/2025 11:59 pm
Workshop 3 29/10/2025 11:59 pm
- Other conditions
- Peer assessed, Longitudinal.
- Learning outcomes
- L01, L03, L04, L05, L06
Task description
This semester we will be doing the QTC trading game. In the game students will work in groups to make hedging decisions given a real world economic scenario.
The trading game will run for 3 weeks and students, in groups, will be required to give a report every week discussing the trading decisions they made. Each report is worth 5% for a total of 15% over the 3 weeks. More information will be provided at a later date.
AI Statement:
Artificial Intelligence (AI) and Machine Translation (MT) are emerging tools that may support students in completing this assessment task. Students may appropriately use AI and/or MT in completing this assessment task. Students must clearly reference any use of AI or MT in each instance.
A failure to reference generative AI or MT use may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Via Blackboard
Deferral or extension
You may be able to apply for an extension.
The maximum extension allowed is 14 days. Extensions are given in multiples of 24 hours.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
Individual Assignment
- Mode
- Written
- Category
- Paper/ Report/ Annotation
- Weight
- 25%
- Due date
31/10/2025 3:00 pm
- Learning outcomes
- L01, L02, L03, L05, L06, L07
Task description
This piece of assessment covers the content of all lecture and involves short answers and calculations. It is done individually. The assessment has two parts:
1. Students will be required to do research into specific elements of the financial crisis and answer questions using their own words and appropriate references.
2. Students will be given a fictional financial institution that is facing various types of financial risk. They will have to critique the current risk management set up as well as provide improvements. This part of the assessment will require the students doing calculations in excel.
More information will be given during the semester.
AI Statement:
Artificial Intelligence (AI) and Machine Translation (MT) are emerging tools that may support students in completing this assessment task. Students may appropriately use AI and/or MT in completing this assessment task. Students must clearly reference any use of AI or MT in each instance.
A failure to reference generative AI or MT use may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Via Blackboard
Deferral or extension
You may be able to apply for an extension.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
End of Semester Examination
- Identity Verified
- In-person
- Mode
- Written
- Category
- Examination
- Weight
- 35%
- Due date
End of Semester Exam Period
8/11/2025 - 22/11/2025
- Other conditions
- Time limited, Secure.
- Learning outcomes
- L01, L02, L03, L05, L06, L07
Task description
The final exam will be during the University examination period at the end of the semester.
The timetabling of this exam is the responsibility of the University of Queensland Examinations Section.
This is in-person, invigilated, paper-based written exam comprises short answer and problem solving questions.
AI Statement:
This assessment task is to be completed in-person. The use of generative Artificial Intelligence (AI) tools will not be permitted. Any attempted use of Generative AI may constitute student misconduct under the Student Code of Conduct.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 120 minutes |
| Calculator options | (In person) Casio FX82 series only or UQ approved and labelled calculator |
| Open/closed book | Closed book examination - specified written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Deferral or extension
You may be able to defer this exam.
Course grading
Full criteria for each grade is available in the Assessment Procedure.
| Grade | Cut off Percent | Description |
|---|---|---|
| 1 (Low Fail) | 0 - 29 |
Absence of evidence of achievement of course learning outcomes. |
| 2 (Fail) | 30 - 46 |
Minimal evidence of achievement of course learning outcomes. |
| 3 (Marginal Fail) | 47 - 49 |
Demonstrated evidence of developing achievement of course learning outcomes |
| 4 (Pass) | 50 - 64 |
Demonstrated evidence of functional achievement of course learning outcomes. |
| 5 (Credit) | 65 - 74 |
Demonstrated evidence of proficient achievement of course learning outcomes. |
| 6 (Distinction) | 75 - 84 |
Demonstrated evidence of advanced achievement of course learning outcomes. |
| 7 (High Distinction) | 85 - 100 |
Demonstrated evidence of exceptional achievement of course learning outcomes. |
Additional course grading information
Grades will be allocated according to University-wide standards of criterion-based assessment.
Supplementary assessment
Supplementary assessment is available for this course.
Learning resources
You'll need the following resources to successfully complete the course. We've indicated below if you need a personal copy of the reading materials or your own item.
Library resources
Library resources are available on the UQ Library website.
Learning activities
The learning activities for this course are outlined below. Learn more about the learning outcomes that apply to this course.
Filter activity type by
Please select
| Learning period | Activity type | Topic |
|---|---|---|
Week 1 |
Lecture |
What do we mean by the word "Risk"? Learning outcomes: L01, L02 |
Week 2 |
Lecture |
The Dynamics of Interest Rate Instruments Learning outcomes: L01, L02 |
Tutorial |
Tutorial 1 Learning outcomes: L01, L02 |
|
Week 3 |
Lecture |
The Macroeconomy and Interest Rates Learning outcomes: L01, L02 |
Tutorial |
Tutorial 2 Ekka Show Day - Wednesday 13 August 2025 - Check Blackboard for announcements about affected classes. Learning outcomes: L01, L02 |
|
Week 4 |
Lecture |
Derivatives - Futures and Forwards Learning outcomes: L01, L02, L03, L05 |
Tutorial |
Tutorial 3 Learning outcomes: L01, L02 |
|
Week 5 |
Lecture |
Derivatives - Swaps Learning outcomes: L01, L02, L03 |
Tutorial |
Tutorial 4 Learning outcomes: L01, L02, L03, L05 |
|
Week 6 |
Lecture |
Derivatives - Options Pricing Learning outcomes: L01 |
Tutorial |
Tutorial 5 Learning outcomes: L01, L02, L03 |
|
Week 7 |
Lecture |
Derivatives - Exotics Options, CDOs and other Recent Advancements Learning outcomes: L01, L06 |
Tutorial |
Tutorial 6 Learning outcomes: L01 |
|
Week 8 |
Lecture |
Tail Risk - Are Returns Normal? Learning outcomes: L01, L06 |
Tutorial |
Tutorial 7 Good Friday Public Holiday - Friday 18 April 2025 - Check Blackboard for announcements about affected classes. Learning outcomes: L01, L06 |
|
Week 9 |
Tutorial |
Tutorial 8 Learning outcomes: L01, L06 |
Lecture |
Case Studies - Lehman Brothers, Gamestop, Silicon Valley Bank Learning outcomes: L01, L06, L07 |
|
Mid Sem break |
No student involvement (Breaks, information) |
In-Semester Break |
Week 10 |
Lecture |
Week 10 Lecture |
Tutorial |
Week 10 Tutorial |
|
Workshop |
Trading Game 1 Learning outcomes: L01, L02, L03, L04, L05 |
|
Week 11 |
Lecture |
Week 11 Lecture |
Tutorial |
Week 11 Tutorial |
|
Workshop |
Trading Game 2 Learning outcomes: L01, L02, L03, L04, L05 |
|
Week 12 |
Lecture |
Week 12 Lecture |
Tutorial |
Week 12 Tutorial |
|
Workshop |
Trading Game 3 Learning outcomes: L01, L02, L03, L04, L05 |
|
Week 13 |
Lecture |
Revision Lecture Learning outcomes: L01, L02, L03, L04, L05, L06, L07 |
Tutorial |
Week 13 Tutorial |
Policies and procedures
University policies and procedures apply to all aspects of student life. As a UQ student, you must comply with University-wide and program-specific requirements, including the:
- Student Code of Conduct Policy
- Student Integrity and Misconduct Policy and Procedure
- Assessment Procedure
- Examinations Procedure
- Reasonable Adjustments for Students Policy and Procedure
Learn more about UQ policies on my.UQ and the Policy and Procedure Library.