FINC312 / FINC612 Individual Assignment

Please note that you are required to hand in a soft copy of this assessment via email. The student id number and selected topic must be in the subject line of the submission.

Aim of the Project

The aim of this project is to familiarise students with issues related to the misapplication of derivative products. Each student’s project should focus on the impact of the case on the company, as well as provide a general understanding of the derivative product involved. In addition, students are expected to briefly discuss the causes of the event and the measures taken by both the company and the local regulator in response.

Project

Students should ensure that they can collect enough information and data on the topic to enable them to analyse the issue and complete the project. The written report on specific event should contain answers to following crucial questions:

1. What event is recognised as the beginning of the debacle?
2. Discuss the trading/hedging strategy which has led to substantial losses.
3. Discuss and evaluate an attitude of senior management in case of debacle. Describe measures that may have prevented losses.
4. What were the aftermaths for company? What happened to individuals who were responsible for losses?
5. What measures were taken (if any) by local market regulator to deal with debacle? How fast was the reaction of local market regulator?

Students will be expected to collect information from a variety of sources including the academic journal articles, newspaper and magazine articles, financial databases including Bloomberg, Factiva, Refinitiv Datastream, and other suitable sources.

Format of Report

The report should consist of the following sections: Title Page, Introduction, Main Text (divided into sections and subsections), Conclusion, and Bibliography. The font used in all submissions should be no smaller than 12-point Times New Roman (i.e., the same font style and size used in this handbook).

The topic for written report: 

Société Générale S.A. (France, 2008) — A rogue trader is credited with losses of approximately €4.9 billion. He specialized in futures hedging on European equity market indices.

Learning Outcomes

This individual assessment is designed to evaluate your ability to:

• Describe and understand the sequence of events surrounding the case.
• Gather, analyse, and interpret information and data from a variety of sources, including academic journals, newspapers, reports from international organisations, and relevant websites.
• Extract key facts from multiple sources.
• Conduct research effectively and collaborate with others in a team environment.
• Use data sources such as Bloomberg and Refinitiv Datastream for financial time series data, and Factiva for newspaper articles.