Units
Treasury and Portfolio Management
Unit code: EFN416
Contact hours: 3 per week
Credit points: 12
Information about fees and unit costs
This unit introduces the student to the treasury environment in which financial institutions operate. The key to the unit is the raising of funds and the management of interest rate risk. This unique hands-on unit allows students to develop these skills by trading in a simulated environment of international economic uncertainty. Students have trading parameters within which they should operate and decisions must be made concerning source of funds, term and duration, interest rate re-set, and risk management with derivatives. Trading will be conducted over a simulated four quarter year.
Availability
| Semester | Available |
|---|---|
| 2013 Semester 1 | Yes |
| 2013 Semester 2 | Yes |
Sample subject outline - Semester 1 2013
Note: Subject outlines often change before the semester begins. Below is a sample outline.
Rationale
Important Information about this Unit
There is an upper limit on the number of students able to take this class.
Rationale
The skills of raising funds and managing interest rate risk are vital to professionals in the area of financial markets. Learning these skills requires students to practice making decisions concerning source of funds, term and duration, interest rate re-set, and risk management with derivatives. The skills are learned best through a hands on approach in which real-life modelling is exploited.
Aims
The aim of the unit is to allow students to develop strong treasury management skills. The structured pedagogy of the unit allows students to develop these skills. Given the combined impact of the curriculum, students should become familiar with treasury operations.
Objectives
Course Learning Goals (Postgraduate)
The QUT Business School has established the Assurance of Learning (AoL) Goals to meet contemporary industry needs and standards. Achieving these learning outcomes will assist you to meet the desired graduate outcomes set at QUT - aligned with other internationally renowned business schools. Students will develop the following caabilities relevant to a contemporary global and sustainable business environment:
Have knowledge and skills pertinent to a particular discipline (KS)
1.1 Well-researched knowledge and critical understanding applied to issues at the forefront of a specialised discipline area
1.2 Ability to select and use effectively a range of tools and technologies to locate and/or generate information appropriate to the disciplinary context
Be critical thinkers and effective problem solvers (CTA)
2.1 Apply logical, critical and creative thinking and judgement to generate appropriate solutions to problems in the disciplinary context
Be professional communicators in an intercultural context (PC)
3.1 Ability to create and present professional documents and/or reports using high levels of analysis/synthesis/evaluation for a range of contexts and audiences
3.2 Ability to orally communicate and justify ideas and information, at a professional level, for a variety of contexts and audiences, including peers and discipline specialists
Be able to work effectively in a Team Environment (TW)
4.1 Operate effectively and with flexibility to achieve common goals in collaborative settings, using a range of skills, including leadership, negotiation, reflection, proactivity and support for team members
Have a Social and Ethical Understanding (SEU)
5.1 Apply knowledge of the ethical, social and cultural dimensions relevant to business situations, including appropriate standards or codes of practice, to provide courses of action
Unit Objectives
On completion of this unit students should be able to:
1. Understand the practicalities of day-to-day treasury operations, evidenced by their adopted treasury strategy.
2. Understand the main issues involved with treasury operations as indicated by their trading view.
3. Trade debt securities given four quarters of trading.
4. Manage a variety of risks associated with fund raising including interest rate risk, foreign currency and counterparty risks.
5. Trade and manage risk based on economic forecasts.
The specific course learning goals and unit objectives that apply to this unit are shown in the assessment section of this unit outline.
Content
The topics covered in this unit are those related to Treasury operations and in particular debt management. Students will develop the necessary skills required to manage a debt portfolio for a group of clients. The skills are gained using interactive software where the students are exposed to interest rate and liquidity risks, debt management techniques, duration and derivatives as a risk management tool.
Approaches to Teaching and Learning
The format of the three week block is repeated representing four quarters of trading. The trading is undertaken by groups of students. At the completion of each quarter, groups will be given feedback about their trading. The portfolio value and cash flow position will be reviewed and revalued.
The unit coordinator will assist in the formation of groups. It is expected that each member will contribute to group output and to ensure this, each group will have at least one member with strong presentation skills, one with strong analytical skills and one with strong computing skills. You will need to decide which of these is your area of strength so that the formation of groups can be expedited in week one.
It can be seen from the above information that the teaching format is three weeks of lectures. One week of lectures is on the relevant concepts, one is on technical/pricing issues, and one is on "application by doing" of the portfolio trading. The trading will be analysed and the portfolio re-positioned and the cycle starts again (commencing in week 4) on a different concept applicable to treasury management.
Assessment
Students will receive feedback in various forms throughout the semester which may include:
- Informal: worked examples, such as verbal feedback in class, personal consultation
- Formal: in writing, such as checklists (e.g. criteria sheets), written commentary
- Direct: to individual students, either in written form or in consultation
- Indirect: to the whole class
Assessment name:
Mid Semester Project
Description:
An analysis of the Quarter Two trading activites for the Central Treasury
Length/Duration: 1,000 words
Formative or Summative: Formative and Summative
Relates to objectives:
Unit objectives: 1, 3, 4, 5 and AOL goals: KS (1.1), KS (1.2), CTA (2.1), PC (3.1), TW (4.1)
Weight:
10%
Internal or external:
Internal
Group or individual:
Group
Due date:
Week 7 (approx).
Assessment name:
Semester Project
Description:
An analysis and presentation of the trading activites for the Central Treasury for one year
Length/Duration: 2,000 words
Formative or Summative: Formative and Summative
Relates to objectives:
Unit objectives: 1, 3, 4, 5 and AOL goals: KS (1.1), KS (1.2), CTA (2.1), PC (3.1), PC (3.2), TW (4.1), SEU (5.1)
Weight:
30%
Internal or external:
Internal
Group or individual:
Group
Due date:
Week 12 (approx)
Assessment name:
End of Semester Examination
Description:
Short answer and calculation questions
Length/Duration: 2 hours plus 10 minutes perusal
Formative or Summative: Summative
Relates to objectives:
Unit objectives: 1, 3, 4, 5 and AOL goals: KS (1.1), KS (1.2), CTA (2.1), PC (3.1), SEU (5.1)
Weight:
60%
Internal or external:
Internal
Group or individual:
Individual
Due date:
Central Exam Period
Academic Honesty
QUT is committed to maintaining high academic standards to protect the value of its qualifications. To assist you in assuring the academic integrity of your assessment you are encouraged to make use of the support materials and services available to help you consider and check your assessment items. Important information about the university's approach to academic integrity of assessment is on your unit Blackboard site.
A breach of academic integrity is regarded as Student Misconduct and can lead to the imposition of penalties.
Resource materials
Prescribed Textbook
NIL
Helpful Texts
Fabozzi, F.J. (2010) Bond Markets, Analysis and Strategies, 7th edition, Prentice Hall.
Peirson, Brown (2012) Easton, Howard & Pinder, Business Finance, 11th edition, McGraw-Hill. (or earlier editions)
Ross, S., Thompson, S., Christensen, M., Westerfield R., Jordan B. & Drew, M., (2011) Fundamentals of Corporate Finance, 5th edition, Mc Graw Hill. (or earlier editions)
Additional Resources
Additional references can also be found at the unit's Blackboard site.
Risk assessment statement
There are no out-of-the-ordinary risks associated with lectures or tutorials in this unit. You should, however, familiarise yourself with evacuation procedures operating in the buildings in which you attend classes and take the time to
view the Emergency video.
Disclaimer - Offer of some units is subject to viability, and information in these Unit Outlines is subject to change prior to commencement of semester.
Last modified: 13-Feb-2013
