Module Code

EC3065

Module title
Financial Engineering

Module Leader
Dr John Hunter

Credit value
20

Level
3

Pre-requisites
EC2024
EC2025

Additional Tutors
Guglielmo Maria Caporale

School(s) responsible for

teaching
School of Social Sciences

Version No.

Date

1.0

8/10/08

Co-requisites

Notes Q&S USE ONLY

JACS Code
L111
N341

AO
LMA

MAIN AIMS OF THE MODULE

The increasing importance of the financial markets highlights the need to develop a deeper understanding of the
way in which financial innovation has attempted to meet the needs of those who manage risk.
The aim of the course is to offer an introduction to the theory and practice of financial engineering. The course will
examine the design, the development and the implementation of financial innovation, in addition to developing a
deeper understanding of the workings of financial markets.

LEARNING OUTCOMES FOR THE MODULE

The module provides opportunities for students to develop and demonstrate knowledge and understanding,
qualities, skills and other attributes in the following areas:
(A) Knowledge and Understanding
1. To understand the role of the financial engineer
2. To recognise, and critically appraise, how published research has examined various aspects of the pricing and
trading of financial instruments
3. To appreciate how financial innovation assists in the management of risk.
4. To apply pricing formulas to price different securities and instruments
(B) Cognitive (thinking) Skills
5. To evaluate the results in terms of the assumptions underlying the pricing formulae.
(C) Other Skills and Attributes (Practical/Professional/Transferable)
6. Numeracy skills
7. Time management and planning
8. Writing skills

MAIN TOPICS OF STUDY:

Financial engineering, Debt market, Debt market innovation, Equity market, Options, Advanced derivatives and
strategies, Financial risk management, Futures Markets, Forward Contracts and Future Pricing, Introduction to
Binomial Trees, Models of Market Price Behaviour, Estimating Volatilities.

TEACHING AND LEARNING METHODS/STRATEGIES USED TO ENABLE THE ACHIEVEMENT OF LEARNING

OUTCOMES: these might include lectures, seminars, tutorials, practicals, workshops, laboratories, distance
learning, projects or other methods (please specify).
One lecture per week
One seminar every other week
CONTACT HOURS: Please state the indicative distribution of learning hours across this module.
Students should normally anticipate 1.5 contact hours per week.

ASSESSMENT METHODS WHICH ENABLE STUDENT TO DEMONSTRATE THE

LEARNING OUTCOMES FOR THE MODULE (please provide the length/duration of
each assessment listed):

WEIGHTING:

Test - Autumn Term

25%

3 hours Examination

75%

INDICATIVE READING LIST:

All University reading lists are now held on Talis Aspire. To search for the reading list of this module click on the
hyperlink and follow the instructions. http://readinglists.brunel.ac.uk/index.html
The following information is required:
COMPULSORY module on the following
programmes (please list):

BSc Economics and Business Finance

BSc Finance and Accounting
BSc Financial Mathematics

OPTION module on the following programmes

(please list):

BSc Financial Computing