ULMS Electronic Module Catalogue
The information contained in this module specification was correct at the time of publication but may be subject to change, either during the session because of unforeseen circumstances, or following review of the module at the end of the session. Queries about the module should be directed to the member of staff with responsibility for the module.
Title Financial Markets and Risk Management for Commodity Industries
Code EXED507
Coordinator Mr JP Laws
Finance and Accounting
J.Laws@liverpool.ac.uk
Year CATS Level Semester CATS Value
Session 2020-21 Level 5 FHEQ Second Semester 10

Pre-requisites before taking this module (other modules and/or general educational/academic requirements):
 

Modules for which this module is a pre-requisite:
 

Programme(s) (including Year of Study) to which this module is available on a required basis:
 

Programme(s) (including Year of Study) to which this module is available on an optional basis:
 

Teaching Schedule
  Lectures Seminars Tutorials Lab Practicals Fieldwork Placement Other TOTAL
Study Hours           20

80

 100
Timetable (if known)              
Private Study 0
TOTAL HOURS 100

Assessment
EXAM Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
             
CONTINUOUS Duration Timing
(Semester)		 % of
final
mark		 Resit/resubmission
opportunity		 Penalty for late
submission		 Notes
2500 coursework  -2500 words    100       

Aims

The aim of this module is to introduce students with no prior knowledge of financial markets and/or economics to three of the most important financial arenas in modern finance, namely, commodity markets, foreign exchange markets and the derivative markets.

Learning Outcomes

(CPS1) Understand the various foreign exchange rate regimes and appreciate how the exchange rate is determined under each regime

(CPS2) Construct an appropriate foreign exchange hedge for both receivables and payables

(CPS3) Use statistical tools to measure and identify price risk in commodity markets

(CPS4) Understand the industry terminology associated with derivatives markets

(CPS5) Understand the information contained in the US Commodity Futures Trading Commission (CTFC) Commitment of Traders (COT) Reports

(CPS6) Construct an appropriate hedge for commodity price risk using futures contracts

(CPS7) Construct an appropriate hedge for commodity price risk using option contracts

(S1) Communication Skills
Participation in online discussions.

(S2) Problem solving skills
Participation in online discussions.

(S3) IT Skills
Participation in online discussions.

(S4) Time Management
Participation in online discussions.

Teaching and Learning Strategies

Online delivery
Students will be provided with a study guide consisting of 6 chapters. The 6 chapters will each be supported by a video podcast where slides will be delivered and data analysis exercises will be demonstrated via the use of appropriate software, such as Excel.
Delivery will be made using VITAL where the discussion forum tool will be used to foster interactivity between lecturer and students. The stream tool will be used to upload the video podcasts Given the small cohort size Skype will be sufficient for ad-hoc video conferences with students.

Syllabus
 

Foreign exchange (FX) market regimes and conventions and trends in FX markets;
Determining the forward foreign exchange rate;
Hedging with forward contracts and money market hedges;
An introduction to futures and options markets;
Hedging using futures markets;
Risks inherent in hedging using futures (Basis risk, quantity risk, timing risk) and the optimal hedge ratio;
Hedging using options markets;
Informational content of derivatives prices and the CTFC Commitment of Traders reports.

Recommended Texts
Reading lists are managed at readinglists.liverpool.ac.uk. Click here to access the reading lists for this module.