Introduction
Chapter 1
Fundamentals of Futures and Options Markets, 7th Ed, Ch 1, Copyright John C. Hull 2010
1
The Nature of Derivatives
A derivative is an instrument whose value depends on the values of other more basic underlying variables
Fundamentals
UNIVERSITY COLLEGE DUBLIN NATIONAL UNIVERSITY OF IRELAND, DUBLIN
Business Strategy (BMGT3001S)
Wal-Mart in China
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Table of Content
1
UNIVERSITY COLLEGE DUBLIN
Treasury Management FIN 30090
STUDY GUIDE
ational University of Ireland, Dublin _ _
2
ational University of Ireland, Dublin _ _
Author:
James K.O'Neill (2011)
Office: Q254, Quinn School of Business Lecturer: Banking and Finance,
Farmer and Baker
A farmer is expecting to have 100,000 bushels of corn in three months ( September)
She wishes to lock-in the price she receives, So she sells forward if she can find a counter-party. If not, she sells a 3 month futures contract. The pri
Credit Derivatives
Chapter 21
Fundamentals of Futures and Options Markets, 6th Edition, Copyright John C. Hull 2007
21.1
Credit Derivatives
Derivatives
where the payoff depends on the credit quality of a company or sovereign entity The market started to
The Greek Letters
Chapter 15
Fundamentals of Futures and Options Markets, 6th Edition, Copyright John C. Hull 2007
15.1
Example (Page 325)
A bank has sold for $300,000 a European call option on 100,000 shares of a non-dividendpaying stock S = 49, K = 50,
Valuing Stock Options:The Black-Scholes Model
Chapter 12
Fundamentals of Futures and Options Markets, 6th Edition, Copyright John C. Hull 2007
12.1
The Black-Scholes Random Walk Assumption
Consider
a stock whose price is S In a short period of time of le
Binomial Trees
Chapter 11
A Simple Binomial Model
l A stock price is currently $20 l In three months it will be either $22 or $18
A Call Option (Figure 11.1, page 242)
A 3-month call option on the stock has a strike price of 21.
Setting Up a Riskless Port
Mechanics of Options Markets
Chapter 8
Fundamentals of Futures and Options Markets, 6th Edition, Copyright John C. Hull 2007
8.1
Types of Options
A
call is an option to buy A put is an option to sell A European option can be exercised only at the end of i
Determination of Forward and Futures Prices
Chapter 5
Fundamentals of Futures and Options Markets, 6th Edition, Copyright John C. Hull 2007
5.1
Consumption vs Investment Assets
Investment
assets are assets held by significant numbers of people purely for
Interest Rates
Chapter 4
Options, Futures, and Other Derivatives 6th Edition, Copyright John C. Hull 2005
4.1
Types of Rates
Treasury
rates LIBOR rates Repo rates
Options, Futures, and Other Derivatives 6th Edition, 4.2
Measuring Interest Rates
The
comp
Hedging Strategies Using Futures
Chapter 3
Options, Futures, and Other Derivatives 6th Edition, Copyright John C. Hull 2005
3.1
Long & Short Hedges
A
long futures hedge is appropriate when you know you will purchase an asset in the future and want to lock
Mechanics of Futures Markets
Chapter 2
Options, Futures, and Other Derivatives, 6th Edition, Copyright John C. Hull 2005
2.1
Futures Contracts
Available
on a wide range of underlyings Exchange traded Specifications need to be defined:
What can be deliver
Mechanics of Futures Markets
Chapter 2
Fundamentals of Futures and Options Markets, 7th Ed, Ch 2, Copyright John C. Hull 2010
1
Futures Contracts
Available
on a wide range of underlyings Exchange traded Specifications need to be defined:
What can be deli