Students will need to describe to the CFO of a company the role of derivatives markets and securitised loans in the financial system. The report must include the benefits of loan securitisation in the financial system. You will also be expected to discuss examples of where the use of derivatives led to undesired effects for the company/financial institution using them and suggest some of the lessons to be learned from your examples.

5. Preparation of professional report Your report must have a title page, contents, executive summary, formatted tables, figures and equations, to mention a few. Ensure that your report is well structured. Marks will be awarded to a coherently discussed and layout report.

(5 marks)

6. Discuss the principle behind securitised loans and derivative markets with examples.

(10 marks)

7. Describe the regulatory aspect of the securitisation and derivative market and comment on firms compliance with relevant regulatory requirements.

(20 marks)

8. Discuss industry controls in place to manage credit and market risks associated with securitised loans and derivative products