instrument or indicator or commodities called underlying instruments (Hull‚ 2009). There are as many derivatives as they are underlying instruments. Derivatives are essentially financial contracts which are entered into between two parties with respect to some other underlying instruments. Since they are contracts entered into with respect to underlying assets they do not have value on their own standing but derive it from that of instruments upon which they are entered into. According to the IMF
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maintenance margin payments if adverse market price changes occur during the period of the contract. There are exchange-traded option contracts and over-the-counter option contracts. For example‚ in Australia‚ exchange-traded options are offered through the ASX‚ which trades options on a number of listed companies‚ LEPOs and warrants‚ and the SFE‚ where options are available on futures contracts. Contracts traded on the organised exchanges are highly standardised. Banks provide an over-the-counter
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act of creating and popularizing new financial instruments as well as new financial technologies‚ institutions and markets. The "innovations" are classified into • Product innovation- The product innovations may be represented by new derivative contracts‚ new corporate securities or new forms
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derivatives‚ financial instruments like futures contracts or options‚ which are derived from other forms of assets. The market can be divided into two‚ that for exchange traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different as well as the way they are traded‚ though many market participants are active in both What Are derivatives:- In most cases derivatives are contracts to buy or sell the underlying asset at a future time‚ with the price‚ quantity
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Evolution of Indian Financial System: A Critical Review EXECUTIVE SUMMARY The Economic Development of a country depends‚ inter alia‚ on the financial system. The larger the proportion of the financial assets (money and monetary assets) to real assets (physical goods and services)‚ the greater the scope for economic growth in the long run. For growth to take place‚ investment is necessary which flows from the financial system. Besides‚ as a scarce factor of production in the Less Development Countries
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basic financial instruments. In other words‚ it represents the financial instruments which derivate from the original ones such as shares ‚ bonds and currency and other basic financial instruments. Derivatives include foreign currency futures and currency options and forward as well as the Swap. Currently‚ at world’s main Mercantile Exchange derivatives have been the major instruments for financial dealing. The reasons for this rapid growth of derivatives can be classified into three aspects: the first
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“crazy” … such as in the case of weather derivatives 2 The derivatives market is the market where derivative securities are traded The four “big” classes of derivatives are: (i) forwards and futures (ii) options (iii) swaps (iv) credit derivatives Users Of Derivatives hedger already has an exposure to future movements in the price of the underlying asset and is interested in reducing risk eg: you own a share and you think the stock price will fall but you do not want to sell the share
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LUFTHANSA If Karl Marx could see what the foreign exchange market is doing to the world’s captains of industry‚ he would surely be laughing. Not only do they put up with labor problems‚ competition‚ deregulation‚ and rapid changes in technology—no‚ that is not enough. Add currency volatility to that list in the last few years. And it’s so bad that a successful corporate executive of one of the world’s prestige airlines can put on a multimillion dollar currency speculation‚ and win—and still
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Derivatives Markets: for Exam FM Yufeng Guo June 24‚ 2007 www.guo.coursehost.com c °Yufeng Guo ii Contents Introduction 1 Introduction to derivatives 2 Introduction to forwards and options vii 1 7 29 79 129 141 3 Insurance‚ collars‚ and other strategies 4 Introduction to risk management 5 Financial forwards and futures 8 Swaps iii CONTENTS CONTENTS www.guo.coursehost.com c °Yufeng Guo iv Preface This is Guo’s solution to Derivatives Markets (2nd edition ISBN 0-321-28030X) for Exam
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1101/125.241 ALBANY Internal Sc CP MASSEY UNIVERSITY ALBANY CAMPUS EXAMINATION FOR 125.241 INTRODUCTION TO INVESTMENTS Semester One – 2011 Time allowed: THREE (3) hours Answer ALL questions in Sections A and B INSTRUCTIONS This is a closed book exam Section A: Answer on the Scantron Card Provided Section B: Answer in the Blue Answer Book provided. Sc: Ensure that your name and identification number are entered on your Scantron Card in the first eight spaces. Record your answer on your
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