FIN40490 Advanced Treasury Management/Financial Engineering

Academic Year 2023/2024

“Financial engineering is the use of financial instruments to restructure an existing financial profile into one having more desirable properties.”
Galitz (2013)

The main tools in a financial engineer’s toolbox are financial derivatives
Financial derivatives are financial assets whose value is derived from the performance of an underlying asset, index, or interest rate. The creation of a financial asset requires the use of contract law – one side’s financial asset is another side’s financial obligation (liability). These contracts can be used for hedging or its corollary, speculation. Common types of derivatives include options, futures, forwards, and of course some of the commonest derivative instruments; debt and equity.

Treasury products are a specific class of financial derivative (financial asset/liability) that relate to interest rate risk, currency risk and also counterparty risk (credit risk).

This module is designed to show you how to use this toolkit to value and to manage risk in your organisation. How you can change the risk profile of operational cash flows to suit investors’ requirements.

(See Brightspace for further information)

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Curricular information is subject to change

Learning Outcomes:

On successful completion of this module, you should be able to:
1. Explain various forms of market structures and securities, interactions and their implications for financial managers
2. Develop a valuation range for a project, enterprise or a company with multiples and discounted cash flow valuation approaches
3. Demonstrate the value impact of capital structure on an organisation
4. Identify applications for financial engineering (i.e. hedging, speculation, arbitrage and deal/transaction structure).
5. Build an Excel spreadsheet to conduct a discounted cash flow analysis of a business financial model

Indicative Module Content:

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Student Effort Type Hours
Lectures

26

Specified Learning Activities

125

Autonomous Student Learning

36

Total

187

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Examination: Exam - see Brightspace
2 hour End of Trimester Exam No Graded No

50

Continuous Assessment: A series of activities and assessments. Details on Brightspace Unspecified n/a Graded No

50


Carry forward of passed components
No
 
Remediation Type Remediation Timing
In-Module Resit Prior to relevant Programme Exam Board
Feedback Strategy/Strategies

• Group/class feedback, post-assessment
• Self-assessment activities

How will my Feedback be Delivered?

TBA

Name Role
Dr James Golden Lecturer / Co-Lecturer
Summer
     
Lecture Offering 51 Week(s) - 41, 43 Fri 14:00 - 15:50
Lecture Offering 51 Week(s) - 41 Mon 10:00 - 12:50
Lecture Offering 51 Week(s) - 41 Mon 14:00 - 16:00
Lecture Offering 51 Week(s) - 43 Mon 14:00 - 16:50
Lecture Offering 51 Week(s) - 43 Thurs 13:00 - 18:00
Lecture Offering 51 Week(s) - 41 Thurs 14:00 - 16:50
Lecture Offering 51 Week(s) - 41, 43 Tues 14:00 - 16:50
Summer
     

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