FINANCIAL DERIVATIVES

← Back to document page

LECTURE NOTES ON FINANCIAL DERIVATIVES MBA IV SEMESTER (IARE R16) Prepared by Mr. M Ramesh Assistant Professor, Department of MBA DEPARTMENT OF MASTER OF BUSINESS ADMINISTRATION INSTITUTE OF AERONAUTICAL ENGINEERING (Autonomous) Dundigal, Hyderabad 500 043 SYLLABUS UNIT- I: INTRODUCTION TO DERIVATIVES Development and growth of derivative markets, types of DERIVATIVES uses of DERIVATIVES , fundamental linkages between spot & derivative markets, the role of DERIVATIVES market, uses and misuses of DERIVATIVES . UNIT-II: FUTURE AND FORWARD MARKET Structure of forward and future markets, mechanics of future markets hedging strategies, using futures, determination of forward and future prices, interest rate futures currency futures and forwards. UNIT-III: BASIC OPTION STRATEGIES Options, distinguish between options and futures, structure of options market, principles of option pricing.

Swaps Swaps are private agreements between two parties to exchange cash flows in the future according to a prearranged formula. They can be regarded as portfolios of forward contracts. The two commonly used swaps are interest rate swaps and currency swaps. 1. Interest rate swaps: These involve swapping only the interest related cash flows

  Rates, Interest, Swaps, Interest rate swaps, Swaps swaps