THE UNIVERSITY OF MELBOURNE 
FNCE30007: Derivative Securities 
Final Examination Guide and Notes 2026 
 
Part 01. About This Guide 
Part 02. Sample Final Examination Paper 
Part 03. Suggested Solutions to Final Exam Paper 
Part 04. Final Examination - Hints and Tips 
 
The 24/7 Online Support You Deserve
Need to reach out to us with questions or for help? You'll connect with a private tutor who is extremely passionate about the subject, ready to provide assistance and ensure that you're on the right track to graduating.
 
Looking for additional study resources?
Explore the most up-to-date revision notes and exam guides available for students at the University of Melbourne

University of Melbourne - FNCE30007: Derivative Securities (Solutions)

$25.00

ACADEMIC YEAR 2025 - 2026

University	University of Melbourne
Study Level	Undergraduate
Subject Code	FNCE30007
Subject Name	Derivative Securities
Notes Title	Final Examination Guide and Notes
Format	PDF
Page Length	30

This exam-focused guide for FNCE30007: Derivative Securities at the University of Melbourne shows you exactly how the final exam is structured and helps you practise the question styles most likely to appear. It breaks down the key question types to prioritise, and highlights the topics that typically carry the most marks. Inside, you’ll get exam-style questions with full answers and step-by-step workings, plus practical final exam hints and tips to help you revise faster, avoid common mistakes, and walk into the exam feeling prepared.

This subject focuses on the application and valuation of derivative securities, such as forwards, futures, swaps and options. The emphasis will be on arbitrage relations, valuation, and hedging with derivatives. The topics covered include; Forwards and futures: the mechanics of trading, price determination, hedging strategies; Swaps: definition and valuation; Options: payoffs, arbitrage bounds, trading strategies, the binomial model, the Black-Scholes model and its relationship to the binomial, hedging, American options and dividends, options on futures, limitations of the binomial and Black-Scholes Models.

✔ On successful completion of this subject, students should be able to:

Explain the role of derivatives exchanges and the characteristics of derivative securities;
Explain the role of arbitrage as a basis for determining the prices of derivative securities;
Explain the mechanics of trading futures contracts, forward contracts and options;
Design and manipulate payoff diagrams for various derivative securities;
Calculate option prices using the Black-Scholes and binomial models;
Explain how derivative securities can be used in hedging;
Reflect on the theoretical limitations of key derivatives pricing models and on practical difficulties that arise in their implementation.

SUBJECT CODE	SUBJECT NAME
ACCT10001	Accounting Reports and Analysis
ACCT10002	Introductory Financial Accounting
ACCT20001	Accounting for Management Decisions
ECOM20001	Econometrics 1
ECOM30001	Basic Econometrics
ECOM30002	Econometrics 2
ECON10003	Introductory Macroeconomics
ECON10004	Introductory Microeconomics
ECON10005	Quantitative Methods 1
ECON20002	Intermediate Microeconomics
ECON20003	Quantitative Methods 2
FNCE20005	Corporate Financial Decision Making
FNCE30001	Investments
FNCE30007	Derivative Securities
FNCE40001	Advanced Corporate Finance
MAST10010	Data Analysis
MAST20005	Statistics

Updated for 2026

University of Melbourne - FNCE30007: Derivative Securities (Solutions)

INFORMATION

SUBJECT DESCRIPTION

RELATED SUBJECTS