Topic_16_E1 - Topic 16 Exercise 1 Futures Security Futures:...

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Topic 16 Exercise 1 Futures Security Futures: The New Game in Town Futures markets originally developed to assist farmers and producers to manage price risk. In the 1980’s, the product line was expanded to financial products based on indices of securities. The market was enormously popular for risk management. Now the possibility exists to have futures contracts on individual securities. For example, you could have a futures contract to buy 100 shares of IBM for delivery in 6 months, or you could sell shares today at an agreed upon price for delivery in 6 months. These securities, single-stock futures, are scheduled for introduction in 2002. They have been introduced in the London markets by LIFFE. A review article appeared in the December, 2001, issue of Futures Industry Magazine entitled, “Security Futures: The New Game in Town.” After reading the article, answer the following questions: 1. What are the potential advantages for the retail investor using single stock futures?
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This note was uploaded on 10/28/2009 for the course MBA MBA608 taught by Professor Martin during the Spring '09 term at Beirut Arab University.

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Topic_16_E1 - Topic 16 Exercise 1 Futures Security Futures:...

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