Official government website of the Government of Kingdom of Saudi Arabia
Link to official Saudi websites end with edu.sa

All links to official educational websites in the Kingdom of Saudi Arabia end with sch.sa or edu.sa

Government websites use the HTTPS protocol for encryption and security.

Secure websites in the Kingdom of Saudi Arabia use the HTTPS protocol for encryption.

Registered with the Digital Government Authority under number:

20250417892
Main
UQU Programs
Actuarial Science and Financial Mathematics

Financial Derivative

MTHF3705
3 hours English

Financial Derivative

Financial Derivatives
MTHF2703 Financial Mathematics
3 hours One requisite
1 Introduction to Derivatives / What Is a Derivative? And Types of derivatives: Forward, Futures, Swaps, Options contracts. / The Uses of Derivatives / Over-the-counter markets vs Exchange-traded markets / Terminology of Derivatives (Buying, selling, end-user, market-maker and Short-Selling Financial Assets, etc..) / Transaction Costs and the Bid-Ask Spread
2 Forward contracts: / Financial Forwards Contract / Commodity Forwards Contract
3 Pricing forward contracts and prepaid forward contracts on stocks
4 Futures Contracts / Financial Futures Contract / Commodity Futures Contract
5 General Properties of Swaps contract
6 Options: Call and Put Option / Option Terminology / Payoff, Profit and diagram for a Purchased Call and Put option / Payoff, Profit and diagram for a Written Call and Put Option
7 Option strategies: / Basic Insurance Strategies: Insuring a Long Position: Floors ,Insuring a Short Position: Caps and Selling Insurance. / Put-Call Parity / Spreads and Collars: Bull and Bear Spreads, Box Spreads, Ratio Spreads, Collars / Speculating on Volatility: Straddles, Butterfly Spreads
8 Risk management
1.1 Mapped to: K2

Demonstrate the differences among the various financial derivative securities: futures, forwards, and options.

Teaching Strategy Lecture
Assessment Methods Direct: Exams, quizzes
1.2 Mapped to: K3

Describe the terminology, risks, and costs associated with financial derivatives.

Teaching Strategy Lecture
Assessment Methods Direct: Exams, quizzes
2.1 Mapped to: S1

Identify the mathematical principles that form the foundation of financial derivatives.

Teaching Strategy Self-study Real-life problems
Assessment Methods Direct: Exams, quizzes
2.2 Mapped to: S2

Evaluate the ability to effectively use established methods for analyzing and solving problems with fundamental skills in calculating and manipulating financial derivatives.

Teaching Strategy Self-study Real-life problems
Assessment Methods Direct: Exams, quizzes
2.3 Mapped to: S3

Effectively identify, communicate, and justify recent advancements in the mathematics of financial derivatives and their practical applications, both orally and in writing.

Teaching Strategy Self-study Real-life problems
Assessment Methods Direct: Exams, quizzes
3.1 Mapped to: V1

Collaborate effectively, independently, and within teams to analyze, value, and apply various financial derivatives in real-world scenarios.

Teaching Strategy Personal questions
Assessment Methods Direct: Participation
3.2 Mapped to: V2

Ensuring confidentiality underscores personal accountability in risk management and informed decision-making while complying with ethical and regulatory standards in financial markets.

Teaching Strategy Teamwork and class discussions.
Assessment Methods Direct: Homework and Mini projects
Assessment
Weight
Homework’s, Quizzes, Mini projects
20%
Midterm
30%
Final Exam
50%
Total
100%