Financial Derivatives
Course Objective:
1. To make students aware of different types of
Derivatives
2. To develop an understanding amongst students of
financial derivatives and associated regulatory framework
3. To have an understanding of the derivative tools
such as options, futures and their application to hedging.
Define Derivatives market; features of
Derivatives, Types of Derivatives, Forward , futures and options market,
Forward market transactions. Explain Forward contracts, Forward market in India ,
Hedging with forwards.
Explain Forwards and Futures Contract, features of forward
contracts. Distinction between futures and
forward , pricing of futures contract, Currency Futures , Hedging in Currency
Futures , Speculation and Arbitrage in Currency Futures , Pricing of Futures. Explain Cost of Carry Model , Application of Market Index , Index Futures in the
Stock Market , Indian Derivatives Market.
Explain Options, Hedging with Currency Options ,
Speculation and Arbitrage with Options , Pricing Options , Black Scholes option pricing Model. Index Options , Hedging with
Index Options, Speculation and Arbitrage with Index Options, Index Options
Market in Indian Stock Market , What ar the Use of different option strategies to mitigate
the risk .
Explain Financial Swaps, Managing Interest Rate Exposure, Interest Rate
Swaps,Currency Swaps , Forward Rate Agreement.
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