Class 11 Chapter 9 Derivative Introduction Class Discussion

Class 11 Chapter 9 Derivative Introduction Class Discussion...

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Class 11 Chapter 9 Introduction to Derivative: Definitions (See the URL below for external help on any definition of financial terms. http://www.investorwords.com/2060/forward_contract.html Discussion items: I) Definitions and examples a) Spot market contracts a. Priced and settled on the spot (now) b. Examples b.i. Buying groceries, gasoline, clothing b) Forward contracts a. Symmetric obligations b. Price settled now c. Settlement at future specified time d. Non standard (idiosyncratic) contract specialized to party/counter party e. Illiquid f. Example of currency forward contracts: http://online.wsj.com/mdc/public/page/2_3021-forex.html?mod=topnav_2_3000 c) Futures contracts—similar to forward contracts additional features make them more liquid a. Symmetric obligations b. Standardized contract specification c. Exchange traded d. “marked-to-market” e. Margins required d) Example:30-YEAR U.S. TREASURY BOND Trade Date: 2/9/2009 for contract included below Globex Futures. For current contract information go to:
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This note was uploaded on 02/22/2012 for the course MANEC 453 taught by Professor Jerrynelson during the Winter '10 term at BYU.

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Class 11 Chapter 9 Derivative Introduction Class Discussion...

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