Lecture 1.pdf - Lecture 1 Introduction Thijs van der...

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1 FNCE 90011, Semester 2 2017 Thijs van der Heijden Lecture 1: Introduction
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2 FNCE 90011, Semester 2 2017 Thijs van der Heijden Content Derivatives are all around If you book a flight 3 months in advance, you’re buying a forward on a seat If you bet on whether Trump will be impeached before the end of his first term, that is a derivative An investment product which gives you the return on the ASX200 with a capital guarantee is a portfolio of derivatives
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3 FNCE 90011, Semester 2 2017 Thijs van der Heijden Versatility of Derivatives Derivatives are versatile They may be used for: Borrowing and lending Saving Insurance or hedging Investment Speculation or gambling Financial engineering
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4 FNCE 90011, Semester 2 2017 Thijs van der Heijden Content (cont’d) We will talk about Forwards & Futures Options Numerical methods Risk management
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