BFC3340 DERIVATIVES 2 EXAM MAIN + DEFERRED/SUPPLEMENTARY FREQUENTLY ASKED QUESTIONS How long is the BFC3340 final examination? Your final exam (also referred to as alternative assessment task) will be held on 5 November 2021– please check your student timetable for the start time (this will be at Australian Eastern Standard time AEST). The assessment duration will be 2 hours and 40 minutes. The assessment will be delivered through the Moodle platform (please refer to further details below). How long is the BFC3340 final examination? EXAM DURATION: 2 hours and 40 minutes (inclusive of reading time) Semester 2 exam times Please refer to your timetable for details about the timing for the BFC3340 final exam. Unsuitable time zone and special arrangements If you’re in a time zone where your final assessment is scheduled to start before 5.00am or finish after 12.30am in your local time, you can apply to have your start time changed. Click https://connect.apps.monash.edu/students/exams/special-arrangements/ to apply. Is the BFC3340 final examination open book? Yes, the BFC3340 examination is open book this semester and the exam will be delivered online using the Moodle platform. What is the format of the exam paper? The exam is in the form of a Word document. What are the accepted forms of responses? Responses must be included in this Word document, or where explicitly specified, in an Excel file. When the response is to be in Excel, you are also offered the option to complete the task in MATLAB instead and upload an m.file. You will see some or all of the following options in the paper: 1 1. Type answer here: Simply type your response in the Word document. 2. Type or insert screenshot of answer here: Simply type your response in the Word document, or write legibly on a piece of paper, take a screenshot and insert the image into the document at the space specified. This option is provided for questions that require calculation and/or writing of equations. 3. Answer this question in Excel. Name the worksheet as …. You can choose to answer this question in MATLAB, in which case, attach a MATLAB script file with functions (if any) at the end of the file. You must answer the question in an Excel file, name the worksheet accordingly and once the exam is completed, upload the file together with your Word document. Use the same Excel file for all questions that require responses in Excel. In case you wish to answer this type of questions in MATLAB, you can do so by uploading a script file that is named accordingly. Any function that is required for the running of the script file is to be inserted at the end of the script, starting with function and ending with end. 4. Type or insert screenshot of answer here. You can also choose to answer this question in Excel (name the worksheet as …) or in MATLAB (attach a MATLAB script file with functions, if any, at the end of the file). Compared to (4), you have the extra choice of responding by working out the calculation manually. Why is Excel used in this exam? 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 exam. Also, Excel has been used in various demonstrations throughout the course. Is there a hurdle requirement for BFC3340? Yes. You must attain a mark of at least 45% in the final exam. If a student fails the hurdle of 45% in the exam and achieves a total unit mark of 45 or above, they will receive a final mark of 45 and an NH grade. If a student fails the hurdle and achieves a total unit mark of 0-44, they will receive their actual mark and an N grade for the unit. Is a formula sheet available for the BFC3340 final examination? Yes. The formula sheet which is now available on Moodle is the formula sheet you will be getting on the day of the final exam. Is the formula sheet comprehensive? Sufficient formulae are provided to enable you to attempt all calculation questions in the final examination. However, no formula is provided for things that relate to basic conceptual 2 understanding such as present value calculation and payoff functions of derivative instruments. In addition, the formula sheet should not be used as a guide as to what questions will or will not be covered in the exam. What is the structure of the BFC3340 final examination? The BFC3340 exam will comprise 6 questions. One of the six questions is in the form of five sets of True/False and Explain questions, in which you are asked to state whether a given statement is true or false, and explain your position. The other five questions are short-answer calculation and/or conceptual questions, some of which are to be completed in Excel. Students can choose to complete these Excel questions in MATLAB if they so wish, in which case, their MATLAB code needs to be clearly commented and final numeric answers explicitly indicated. How do I prepare for Excel/MATLAB calculation questions? To enable efficient execution of the exam, prior to the exam, you should have an Excel file with a set of worksheets that are set up to perform different calculation tasks covered in the unit or a set of MATLAB m.files To assist with this preparation, we have made available some “templates” in Templates.xlsx under Moodle folder Assessments and Exam. These templates facilitate the setup of binomial tree option pricing involving several steps, Monte Carlo simulation option pricing and computation of CDS spreads. These templates provide you with a suggested set up only and you need to populate them with formulas and test that they work before the exam (by trying to replicate relevant tutorial questions). 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/MATLAB, clear commenting is required. 3 How do I submit my exam? Upon completion of the exam, (1) name the Excel/MATLAB files using your student ID and (2) upload to Moodle the Excel/MATLAB files together with the Word document through Moodle submission. This submission must occur within 2 hours and 40 minutes of the commencement of the task commencement time (Australian Eastern Daylight Time). What do I need to study? The final exam covers lecture materials and associated tutorials, subject to the exclusion below. Important: ❑ Lecture Notes and all illustrations provided throughout the semester ❑ Lecture Recordings ❑ Tutorial Workshop Questions/Solutions ❑ Tutorial Recordings Exclusion The following are NOT examinable: - Week 11 lecture material - Proofs using BSM partial differential equation - Proofs using Ito’s Lemma 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. Is there a past exam paper for practice? We have uploaded the 2019 exam paper and solution on Moodle. You should consult the solution only after making a serious attempt on the questions. Some questions may fall into areas that are not examinable in 2020, in which case, you can safely ignore them. The coming exam will be different from this past exam. What are the exam consultation sessions? We will hold the following Zoom consultations (all in Melbourne time). Consultation times will be posted on Moodle. 4 You can also ask questions by posting on Moodle’s Assessment forum. We’ll attempt to respond within 24 hours. Is Stock Trak trading covered in the exam? No. Important-Academic Integrity Please refer to the BFC3340 Moodle site which has an entire folder devoted to Academic Integrity. What if I am sick on the day of the final examination? Students enrolled at an Australian campus must use the online system (refer to link below) only for end-of-semester exams that appear in your exam timetable in WES. You must not contact the Chief Examiner to apply for special consideration. Any applications received will be sent to the CE after applications have been lodged online using the link below. Link: http://www.monash.edu/exams/changes/special-consideration 5