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sect-7-2 - 1/89 Chapter 7. Derivatives markets. Manual for...

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Unformatted text preview: 1/89 Chapter 7. Derivatives markets. Manual for SOA Exam FM/CAS Exam 2. Chapter 7. Derivatives markets. Section 7.2. Forwards. c 2009. Miguel A. Arcones. All rights reserved. Extract from: Arcones Manual for the SOA Exam FM/CAS Exam 2, Financial Mathematics. Fall 2009 Edition, available at http://www.actexmadriver.com/ c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 2/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. Forwards Definition 1 A forward is a contract between a buyer and seller in which they agree upon the sale of an asset of a specified quality for a specified price at a specified future date. Forward contracts are privately negotiated and are not standardized. Common forwards are in commodities, currency exchange, stock shares and stock indices. c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 3/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 4/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: I forces the seller to sell and the buyer to buy. c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 5/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: I forces the seller to sell and the buyer to buy. I spells out the quantity, quality and exact type of asset to be sold. c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 6/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: I forces the seller to sell and the buyer to buy. I spells out the quantity, quality and exact type of asset to be sold. I states the delivery price and the time, date and place for the transfer of ownership of the asset. c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 7/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: I forces the seller to sell and the buyer to buy. I spells out the quantity, quality and exact type of asset to be sold. I states the delivery price and the time, date and place for the transfer of ownership of the asset. I specify the time, date, place for payment. c 2009. Miguel A. Arcones. All rights reserved. Manual for SOA Exam FM/CAS Exam 2. 8/89 Chapter 7. Derivatives markets. Section 7.2. Forwards. A forward contract states the following: I forces the seller to sell and the buyer to buy. I spells out the quantity, quality and exact type of asset to be sold....
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This note was uploaded on 04/09/2012 for the course MATH 172a taught by Professor Kong,l during the Fall '08 term at UCLA.

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sect-7-2 - 1/89 Chapter 7. Derivatives markets. Manual for...

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