Transcription of FINANCIAL DERIVATIVES
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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.
certainty to returns and minimize risks. Derivatives are contracts that originated from the need to limit risk. Derivative contracts can be standardized and traded on the stock exchange. Such derivatives are called exchange-traded derivatives. Or they can be customized as per the needs of the user by negotiating with the other party involved.
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