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Financial Engineering in Property (ABPL90406)
Graduate courseworkPoints: 12.5On Campus (Parkville)
About this subject
- Overview
- Eligibility and requirements
- Assessment
- Dates and times
- Further information
- Timetable(opens in new window)
Contact information
Semester 2
Overview
Availability | Semester 2 |
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Fees | Look up fees |
Property is the choice of investors amongst many avenues of asset classes and constitutes a significant share of the global wealth. The economic performance of most developed countries is influenced by the performance of their real estate markets. The property investment has witnessed numerous cycles of growth and recession, and is now considered as a mature and sophisticated market. In order to attract even wider participation, and to meet the appetite of diverse range of investors, newer instruments (in particular) real estate derivatives, are being developed across the globe. While financial and commodity derivative products are being used widely, financial engineering in property is relatively recent. These products have the potential to offer better returns and diversification, while prone to significant risks as the potential to destabilize the operating environment is large. It would be imperative to have better risk management capacity to configure and utilize these instruments.
The aim of this subject is to expose you to the linkage between structured finance and property markets, and the functioning of financial engineering products prevalent in Property domain, in particular real estate derivates, and to equip you with knowledge, skills required to understand, analyse and value different derivative instruments
This subject is designed to capitalise on the multi-disciplinary nature of participants. As such, it uses active discussions, interactive problem solving, peer review and group work, among other teaching and learning activities. In addition, the major assessment task is designed to allow for a significant amount of flexibility as you will be able to determine the focus of your own assignment. You will also be able to vote to determine subject content towards the end of the semester.
Intended learning outcomes
On completion of this subject, students should be able to
- Differentiate the main features of various structured products and demonstrate the applicability in real estate markets
- Learn to generate a base financial model for structured products
- Apply the understanding of the concepts of options, forwards, futures and swaps to property;
- Relate the linkages between risks in real estate and structured finance products, and formulate methods to mitigate the same.
- Examine various real estate derivative models being used in the industry
Generic skills
- Solve complex problems creatively, using a combination of systemic, design and analytical thinking
- Rapidly and correctly estimate quantities and their order of magnitude
- Work in teams and capitalise on interdisciplinary knowledge
- Provide constructive feedback to peers
- Communicate effectively using data visualisation techniques where appropriate
Last updated: 3 November 2022
Eligibility and requirements
Prerequisites
Code | Name | Teaching period | Credit Points |
---|---|---|---|
ABPL90026 | Property Development | Semester 1 (On Campus - Parkville) |
12.5 |
Corequisites
None
Non-allowed subjects
None
Recommended background knowledge
Knowledge and interest in property finance, interest to learn about how different financial products work and to relate property to broader financial and operating environment. Students are assumed to have reasonable knowledge of basic statistics (such as mean, median, expected value, standard deviation and variance) and basic finance concepts (like discounting/compounding, risk and return).
Inherent requirements (core participation requirements)
The University of Melbourne is committed to providing students with reasonable adjustments to assessment and participation under the Disability Standards for Education (2005), and the Assessment and Results Policy (MPF1326). Students are expected to meet the core participation requirements for their course. These can be viewed under Entry and Participation Requirements for the course outlines in the Handbook.
Further details on how to seek academic adjustments can be found on the Student Equity and Disability Support website: http://services.unimelb.edu.au/student-equity/home
Last updated: 3 November 2022
Assessment
Additional details
- Three in class quizzes, 500 words equivalent per quiz (cumulative 1500 words equivalent). Due week 3, 7, and 11 (10% each);
- Applicability of financial engineering methods to a property market in a region. Group work, including oral presentation (5 minutes per student; group size 3 – 5), analysis and assumption notes, 1500 words equivalent per student (including the preparation for oral presentation), due in week 9, 30% in total (10% oral presentation and 20% written report)
- Assignment on financial engineering products in property. Oral presentation (10 minutes per student), financial model and assumption notes, 2000 words equivalent (including the preparation for oral presentation). Due week 12, 40% in total ( 20% oral presentation and 20% written report).
Last updated: 3 November 2022
Dates & times
- Semester 2
Principal coordinator Raghu Dharmapuri Tirumala Mode of delivery On Campus (Parkville) Contact hours 1X2 hour lecture and 1X1 hour tutorial per week Total time commitment 170 hours Teaching period 29 July 2019 to 27 October 2019 Last self-enrol date 9 August 2019 Census date 31 August 2019 Last date to withdraw without fail 27 September 2019 Assessment period ends 22 November 2019 Semester 2 contact information
Last updated: 3 November 2022
Further information
- Texts
Prescribed texts
Real Estate Derivatives: From Econometrics to Financial Engineering by Radu S. Tunaru
- Available through the Community Access Program
About the Community Access Program (CAP)
This subject is available through the Community Access Program (also called Single Subject Studies) which allows you to enrol in single subjects offered by the University of Melbourne, without the commitment required to complete a whole degree.
Entry requirements including prerequisites may apply. Please refer to the CAP applications page for further information.
- Available to Study Abroad and/or Study Exchange Students
This subject is available to students studying at the University from eligible overseas institutions on exchange and study abroad. Students are required to satisfy any listed requirements, such as pre- and co-requisites, for enrolment in the subject.
Last updated: 3 November 2022