Fall 2007

Course objectives:

1. Provide an understanding of commodity futures and options contracts.

2. Develop skills in futures and options trading for hedging and other purposes.

3. Analyze the pricing of futures and options in the markets where they are traded, and the relationship of these derivatives to real commodity prices.

4. Provide the analytical background for assessment of government policies related to futures and options markets.

Prerequisites: ECON 306 and ECON 321 (or BMGT 230), or equivalent courses in microeconomics and statistics are highly recommended.  This course uses quantitative economic analysis and applied statistics.

Text:  Colin A. Carter. Futures and Options Markets: An Introduction. Waveland Press Inc. (paperpack) 2007.

Grading: Grades will be computed based on a mid-term exam (20%), a final exam (40%) and written assignments (40%).  The main factor determining grades on the written assignments will be providing complete work, on time; it is less important whether all the conclusions you reach or statements you make are correct.  Being late on an assignment costs 1 letter grade -- that is, you get one grade lower than what you would have received for the same product on time, and the highest grade you can get on a late assignment is a B. 

Half of the 40% allocated to written assignments will be determined by the quality of a paper on a commodity market or commodity-related issue that will due at the time of the final exam.  This paper will summarize findings from your following a commodity market during the semester – trends and causes of short-term or longer-term changes in prices of the commodities, and results from investments in futures or options for the commodity of your choice.  Written assignments throughout the semester will involve developing information about the commodities that will be raw material for this final paper.

Mid-term exam: October 25, 2007 (Thursday)

Final exam and turn in papers:  1:30 to 3:30 p.m., December 18, 2007 (Tuesday)

Academic Dishonesty: The rules and regulations of the University regarding academic dishonesty will be followed. Academic dishonesty is defined as follows.

(a) CHEATING: intentionally using or attempting to use unauthorized materials, information, or study aids in any academic exercise.

(b) FABRICATION: intentional and unauthorized falsification or invention of any information or citation in an academic exercise.

(c) FACILITATING ACADEMIC DISHONESTY: intentionally or knowingly helping or attempting to help another to violate any provision of this Code.

(d) PLAGIARISM: intentionally or knowingly representing the words or ideas of another as one's own in any academic exercise.

Using words or ideas of another person is permitted but you must clearly identify the source of the words or ideas.    Students are encouraged to work together on homework assignments; however, you must each write up your own homework independently. 

Consult the SCHEDULE OF CLASSES, Fall 2007, second edition, p. 22, for more details on University policies in this important area.  Students are responsible for proper behavior in these matters, and in furtherance of that, you will be asked to sign the Student Honor Pledge on exams and your final paper.

Policy on Students with Disabilities, and Counseling:  The University is obligated to provide appropriate accommodations for students with documented disabilities. The Disability Support Services Office of the Counseling Center can provide information on procedures (301-314-7688).  In order to ascertain what accommodations may need to be provided, students with disabilities should see me concerning their needs at the beginning of the semester.  Note that the Counseling Center provides not only Career Counseling but also personal/social counseling on a wide range of issues and problems (301-314-7651).