## BFF5340 ADVANCED DERIVATIVES

## FREQUENTLY ASKED QUESTIONS

## MID SEMESTER TEST

高级衍生品代写 Please refer to the BFF5340 Moodle site which has an entire folder devoted to Academic Integrity.

### Important-Academic Integrity

Please refer to the BFF5340 Moodle site which has an entire folder devoted to Academic Integrity.

The key message is while it can be tempting to “collaborate” with other students in this test environment, if caught, the consequences are severe and not worth the risk. Do the right thing!

When and how long is the Mid Semester Test (MST)?

Your MST will be held during the teaching week 7 – please check your student timetable for the start time (this will be at Australian Eastern Standard time AEST). The assessment duration will be 1 hour and 30 minutes including reading and upload/download time. The assessment will be delivered through the Moodle platform (please refer to further details below).

Is the MST open book?

Yes, the BFF5340 MST is open book this semester and the test will be delivered online using the Moodle platform.

What is the format of the test paper?

The test is in the form of a Word document.

### What are the accepted forms of responses? 高级衍生品代写

Responses must be included in the exam Word document, or where explicitly specified, in an Excel file. You will see the following options in the paper:

1. Type answer here: Simply type your response in the Word document.

2. Answer this question in Excel. Name the worksheet as …. You must answer the question in an Excel file, name the worksheet accordingly and once the test is completed, upload the file together with your Word document. Use the same Excel file for all questions that require responses in Excel.

Why is Excel used in this test?

As the most basic tool for computational finance, it is ideal for simple repetitive calculations and optimisation that cannot be efficiently performed by hand. The Moodle task format allows for this tool to be incorporated in the test. Also, Excel has been used in various demonstrations throughout the course.

Is there a hurdle requirement for the test?

No, not for this MST.

Is a formula sheet available for the MST?

Yes. The formula sheet which is now available on Moodle is the formula sheet you will be getting on the day of the test.

### Is the formula sheet comprehensive? 高级衍生品代写

Sufficient formulae are provided to enable you to attempt all calculation questions in the test. However, no formula is provided for things that relate to basic conceptual understanding such as present value calculation and payoff functions of derivative instrument.

In addition, the formula sheet should not be used as a guide as to what questions will or will not be covered in the test.

What is the structure of the MST?

The test will comprise 3 questions, each possibly containing more than 1 part. The questions test both theoretical understanding as well as Excel-based calculations. There is a great deal of familiarity between test questions and tutorial questions although some parts may draw on a deep level of understanding of the materials as a whole. Expect some questions to test your ability to apply knowledge to address a practical scenario.

### What do I need to study?

The MST covers lecture materials in weeks 1, 2 and 3 and associated tutorials, including

D Lecture Notes and all illustrations provided during the seminars 高级衍生品代写

D Lecture Recordings

D Tutorial Questions/Solutions

D Tutorial Recordings

D MST Practice Questions/Solutions

Be prepared to be tested on applying theories using critical skills rather than purely being required to plug inputs in a given formula to derive an answer. Some questions will test the ability to extend the solution on simplified problems to a more realistic setting.

Am I expected to derive formulas?

You are expected to be able to perform the derivations that are covered in the lectures and tutorials and other derivations ofsimilar nature. This type of questions may require you to either explicitly derive a result or explain the steps involved in deriving the result.

Is VBA coding tested?

No.

### How do I prepare for Excel calculation questions?

To enable efficient execution of the MST, prior to the test, you should have an Excel file with a set of worksheets that are set up to perform different calculation tasks covered in the lectures and tutorials.

How many decimal points should I round my answers to?

Unless a question specifically asks you to round (for example, to two decimal places) then it does not matter. You are strongly advised however to leave the rounding to your final answer, and not to round your inputs during the workings of the problem. For the Excel based questions, as you will need to use formulas instead of typing in numeric answers, the issue of decimal points does not apply. However, when stating final answers in the Excel file, use two decimal places for dollar amount and four decimal places for rate amounts (interest rates, spreads, hazard rate, probability).

Will I have to show my workings for calculation questions?

Yes. A good response to a calculation question will state the formula, the inputs and the final answer. When the question is to be answered in Excel, workings are shown by way of clear commenting for each step (in the case of binomial tree applications for example, Input, Tree parameters, Stock price, Option price…)

### How do I submit my MST? 高级衍生品代写

Upon completion of the test,

1. Name the Excel file using your student ID (put all of your Excel answers in 1 Excel file) and

2. Upload to Moodle the Excel file together with the Word document through Moodle submission. This submission must occur within the duration of the test.

Are there test questions for practice?

There is a set of practice questions and solution on Moodle. You should consult the solution only after making a serious attempt on the questions. For this reason, the solution file will be accessible closer to the test date.

### What are the consultation sessions prior to the test?

Yes via the usual weekly consultations via Zoom.

You may also request another consultation subject to availability.

You can also ask questions by posting on Moodle’s Assessment forum. I’ll attempt to respond within 24 hours.

Will you go through the solution after the test? When will the mark be released? 高级衍生品代写

Yes, I will discuss the solution during my weekly consultation following the test. The mark will be released 1 week after the test.

Is RPM trading covered in the test?

There won’t be questions specifically related to the RPM platform. However, you may be tested on trading in general.

What if I am sick on the day of the test day?

Please contact Monash Connect to apply for a special consideration. You may want to send me an email for a heads up.