Information Package / Course Catalogue
| Psychology | |||||
| Bachelor | Length of the Programme: 4 | Number of Credits: 240 | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF: Level 6 |
ECTS Course Information Package
| School/Faculty/Institute | Faculty of Engineering | ||||||
| Course Code | IE 431 | ||||||
| Course Title in English | Introduction to Financial Engineering | ||||||
| Course Title in Turkish | Finans Mühendisliğine Giriş | ||||||
| Language of Instruction | EN | ||||||
| Type of Course | Flipped Classroom,Lecture | ||||||
| Level of Course | Introductory | ||||||
| Semester | Spring,Fall | ||||||
| Contact Hours per Week |
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| Estimated Student Workload | 148 hours per semester | ||||||
| Number of Credits | 6 ECTS | ||||||
| Grading Mode | Standard Letter Grade | ||||||
| Pre-requisites |
MATH 104 - Mathematics for Social Sciences II | MATH 116 - Calculus II |
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| Co-requisites | None | ||||||
| Expected Prior Knowledge | Basic quantitative skills | ||||||
| Registration Restrictions | none | ||||||
| Overall Educational Objective | To learn what derivative securities are, how they are valued and how they can be used in both financial risk management and in trading. | ||||||
| Course Description | The aim of this course is to provide the students with a comprehensive introduction to derivative securities and their application in financial engineering. The course will cover; what forwards, futures, options and swaps are; how they can be used as risk transferring/minimizing devices (hedging); how they can be used to create additional value to firms (trading); and how they are valued (pricing and marking to market). Cost of carry valuation model for forwards/futures, binomial pricing for options, dynamic delta hedging, the Black Scholes formula, Greek letters (delta, gamma, vega, theta) and value at risk (VaR) will also be introduced. |
Course Learning Outcomes and CompetencesUpon successful completion of the course, the learner is expected to be able to:1) describe the nature of and apply valuation methods for forwards, futures and swaps; 2) explain how to manage interest rate and foreign exchange risk via forwards, futures and swaps; 3) identify the characteristics and uses of options; 4) apply option strategies for trading and risk management purposes; 5) identify and analyze the influence of determinants of the value of options; 6) construct Black Scholes and Binomial option pricing methods; 7) apply delta hedging and value at risk concepts. |
| Program Learning Outcomes/Course Learning Outcomes | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| 1) Thorough knowledge of the major concepts, theoretical perspectives, empirical findings, and historical trends in psychology. | |||||||
| 2) Understanding of and ability to apply essential research methods in psychology, including research design, data analysis, and data interpretation. | |||||||
| 3) Competence to use critical and creative thinking, skeptical inquiry and a scientific approach to solving problems related to behavior and mental processes. | |||||||
| 4) Understanding and ability to apply psychological principles, skills and values in personal, social, and organizational contexts. | |||||||
| 5) Ability to weigh evidence, to tolerate ambiguity, and to reflect other values that underpin psychology as a discipline. | |||||||
| 6) Internalization and dissemination of professional ethical standards. | |||||||
| 7) Demonstration of competence in information technologies, and the ability to use computer and other technologies for purposes related to the pursuit of knowledge in psychology and the broader social sciences. | |||||||
| 8) Skills to communicate the knowledge of psychological science effectively, in a variety of formats, in both Turkish and in English (in English, at least CEFR B2 level). | |||||||
| 9) Recognition, understanding, and respect for the complexity of sociocultural and international diversity. | |||||||
| 10) Recognition for the need for, and the skills to pursue, lifelong learning, inquiry, and self-improvement. | |||||||
| 11) Ability to formulate critical hypotheses based on psychological theory and literature, and design studies to test those hypotheses. | |||||||
| 12) Ability to acquire knowledge independently, and to plan one’s own learning. | |||||||
| 13) Demonstration of advanced competence in the clarity and composition of written work and presentations. |
Relation to Program Outcomes and Competences
| N None | S Supportive | H Highly Related |
| Program Outcomes and Competences | Level | Assessed by | |
| 1) | Thorough knowledge of the major concepts, theoretical perspectives, empirical findings, and historical trends in psychology. | N | |
| 2) | Understanding of and ability to apply essential research methods in psychology, including research design, data analysis, and data interpretation. | N | |
| 3) | Competence to use critical and creative thinking, skeptical inquiry and a scientific approach to solving problems related to behavior and mental processes. | H | Exam,HW,Participation |
| 4) | Understanding and ability to apply psychological principles, skills and values in personal, social, and organizational contexts. | N | |
| 5) | Ability to weigh evidence, to tolerate ambiguity, and to reflect other values that underpin psychology as a discipline. | N | |
| 6) | Internalization and dissemination of professional ethical standards. | N | |
| 7) | Demonstration of competence in information technologies, and the ability to use computer and other technologies for purposes related to the pursuit of knowledge in psychology and the broader social sciences. | N | |
| 8) | Skills to communicate the knowledge of psychological science effectively, in a variety of formats, in both Turkish and in English (in English, at least CEFR B2 level). | N | |
| 9) | Recognition, understanding, and respect for the complexity of sociocultural and international diversity. | S | Participation |
| 10) | Recognition for the need for, and the skills to pursue, lifelong learning, inquiry, and self-improvement. | S | HW,Participation |
| 11) | Ability to formulate critical hypotheses based on psychological theory and literature, and design studies to test those hypotheses. | N | |
| 12) | Ability to acquire knowledge independently, and to plan one’s own learning. | S | Exam,HW |
| 13) | Demonstration of advanced competence in the clarity and composition of written work and presentations. | H | Exam,HW |
| Prepared by and Date | HANDE KÜÇÜKAYDIN , March 2024 |
| Course Coordinator | HANDE KÜÇÜKAYDIN |
| Semester | Spring,Fall |
| Name of Instructor | Öğr. Gör. AHMET AKÇA |
Course Contents
| Week | Subject |
| 1) | Introduction to Derivatives – Chapter 1 |
| 2) | Mechanics of Forwards and Futures – Chapters 2 and 5 |
| 3) | Hedging Strategies using Forwards and Futures – Chapter 3 |
| 4) | Hedging Strategies using Forwards and Futures – Chapter 4 |
| 5) | Hedging Strategies using Forwards and Futures – Chapter 6 |
| 6) | Swaps – Chapter 7 |
| 7) | Mechanics of Options – Chapter 10 |
| 8) | Properties of Stock Options – Chapter 11 |
| 9) | Trading Strategies involving Options – Chapter 12 |
| 10) | Binomial Trees – Chapter 13 |
| 11) | The Black Scholes Merton Model – Chapter 15 |
| 12) | Greek Letters – Chapter 19 |
| 13) | Volatility Smiles – Chapter 20 |
| 14) | Value at Risk – Chapter 22 |
| 15) | Final Exam/Project/Presentation period |
| 16) | Final Exam/Project/Presentation period |
| Required/Recommended Readings | Required: Fundamentals of Futures and Option Markets, John C. Hull, 9th Edition, Pearson Optional: Options, Futures and Other Derivatives, John C. Hull, 9th Edition, Pearson | |||||||||||||||||||||
| Teaching Methods | Lectures/contact hours using “flipped classroom” as an active learning technique | |||||||||||||||||||||
| Homework and Projects | Homeworks | |||||||||||||||||||||
| Laboratory Work | none | |||||||||||||||||||||
| Computer Use | Compulsory to bring calculators to the classes and exams. Exchange of calculators are not allowed during exams. Optional to bring a notebook as MS Excel might be used during classes. | |||||||||||||||||||||
| Other Activities | none | |||||||||||||||||||||
| Assessment Methods |
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| Course Administration |
akcaa@mef.edu.tr, ahmetakca@gmail.com Instructor’s office and phone number: TBD office hours: Appointment by e-mail email address: akcaa@mef.edu.tr, ahmetakca@gmail.com Missing a quiz: Provided that proper documents of excuse are presented, each missed quiz by the student will be given a grade by taking the average of all of the other quizzes. No make-up will be given. Missing a project: Project deadlines are always extendable up to 24 hours, 10% of total attainable score will be deducted from late submissions Missing a midterm: Provided that proper documents of excuse are presented, each missed midterm by the student will be given the grade of the final exam. No make-up will be given. Missing a final: Faculty regulations. A reminder of proper classroom behavior, code of student conduct: YÖK Regulations Academic dishonesty and plagiarism: YÖK Regulations |
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ECTS Student Workload Estimation
| Activity | No/Weeks | Hours | Calculation | ||||
| No/Weeks per Semester | Preparing for the Activity | Spent in the Activity Itself | Completing the Activity Requirements | ||||
| Course Hours | 14 | 1 | 3 | 56 | |||
| Homework Assignments | 5 | 3 | 3 | 30 | |||
| Quiz(zes) | 4 | 3 | 1 | 16 | |||
| Midterm(s) | 1 | 20 | 3 | 23 | |||
| Final Examination | 1 | 20 | 3 | 23 | |||
| Total Workload | 148 | ||||||
| Total Workload/25 | 5.9 | ||||||
| ECTS | 6 | ||||||