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Unit of Study

Finance Theory
UoS Code FINC3021
Credit points 6
Offered Semester 1
Prerequisites FINC2012 or FINC2002
Prohibitions FINC2013
Assumed Knowledge HSC 3 Unit mathematics
Additional Information This is a useful subject for students contemplating going on to study at honours level and/or undertake subsequent research degrees.
Lectures 1x 2hr lecture and 1x 1hr tutorial per week; Additional workshops as required.
Assessment Final (50%), mid semester (25%), assignment (25%)
Description The aim of this unit is to provide students with a thorough understanding of some standard financial models from a mathematical perspective. Many of the greatest innovations in finance have been mathematical in nature and it is our aim to study the models along those lines. Specifically, we will concern ourselves with portfolio theory, CAPM, fundamental theorems of asset pricing and derivative valuation through the Black-Scholes and binomial models. Though some topics may appear familiar from previous courses, we will undertake a more quantitative approach to these models, starting from first principles, which will provide a greater depth of understanding. While the background mathematics will be taught as part of this unit, students are expected to be competent with basic mathematics.