THE UNIVERSITY OF NEWCASTLE 
FINN3003: 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 
 
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University of Newcastle - FINN3003: Derivative Securities (Solutions)

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ACADEMIC YEAR 2025 - 2026

University	University of Newcastle
Study Level	Undergraduate
Course Code	FINN3003
Course Level	3000-level
Course Name	Derivative Securities
Notes Title	Final Examination Guide and Notes
Page Length	30

Studying FINN3003: Derivative Securities at the University of Newcastle? This exam-focused guide shows you 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 find exam-style questions with fully worked solutions and step-by-step workings, plus practical hints and tips to help you revise faster and avoid common mistakes. Use these notes as a reference to strengthen your understanding of each topic and improve your performance in the final examination.

Investment concerns financial decision-making about where to place wealth to provide for future returns. Students will develop an understanding of binomial option pricing, the Black-Scholes option-pricing model, put-call parity for European and American options on a diverse range of asset classes. The use of futures and options, payoff structures for options and arbitrage bounds will also be examined. Students will engage in independent or collaborative work processes and develop effective profesional communication skills.

✔ Upon completion of this course, students will be able to:

Explain what a futures contract is, how futures markets are organised and the determinants of futures prices.
Interpret and explain speculation and hedging strategies using futures contracts, inclusive of reasons for imperfection.
Identify the major types and characteristics of options, distinguish between options and futures, explain the factors that affect option prices, and apply basic option pricing theorems, including put-call parity.
Apply the Black-Scholes and binomial option pricing models in pricing options.
Analyse and communicate financial information leading to independent investment decision making.

✔ Topics:

Futures market and trading
Speculation and hedging using futures
Futures pricing
Options properties for both European and American contracts
Put-call parity
Binomial option pricing
Black-Scholes option pricing

COURSE CODE	COURSE NAME
ACFI1001	Accounting for Decision Makers
ACFI1002	Accounting Practice
ACFI1003	Introduction to Finance
ACFI2003	Management Accounting
ACFI2012	Accounting for Corporate Entities
ACFI2070	Business Finance
ACFI2080	Corporate Finance
ACFI3004	Taxation
ACFI3018	Portfolio Management
ACFI3130	Derivative Securities
ECON1001	Microeconomics for Business Decisions
ECON1002	Macroeconomics in the Global Economy
ECON1003	Basic Econometrics and Quantitative Modelling
ECON2001	Intermediate Microeconomics
ECON2004	Money and Banking
LEGL1001	Foundations of Law
MKTG1001	Foundations of Marketing
MNGT1001	Introduction to Management
STAT1060	Business Decision Making
STAT1070	Statistics for the Sciences

Updated for 2026

University of Newcastle - FINN3003: Derivative Securities (Solutions)

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