Derivatives

DERIVATIVES & RISK MANAGEMENT ASSIGNMENT – II By: ATTIKA RAJ, ROLL NO: MS10A009, MBA- 2012 BATCH, DOMS, IITM 2/21/2012 I. Case Analysis – Risk management Policy of Lufthansa Submitted in Assignment 1 II. Case Analysis: Commodity Market Derivatives Case Solutions: 1. Discuss the risk exposure of Amarnath hedge fund. Ans: The Amaranth hedge fund was exposed to following risks: a. Market risk: The risk that occurs from the volatility of investment returns b. Liquidity risk: It measures

Equity Derivative Strategies Equity Derivative Strategies Joanne M. Hill Vice President, Equity Derivatives Goldman, Sachs & Company Understanding the tax implications of equity derivatives and the application of these instruments for taxable U.S. clients is a challenge worth meeting. Equity derivatives can playa useful role in implementing tax-efficient strategies that maximize after-tax returns. The key is to understand the costs, benefits, and rules for applying each instrument or strategy

Reserve Bank of India Occasional Papers Vol. 24, No. 3, Winter 2003 Derivatives and Volatility on Indian Stock Markets Snehal Bandivadekar and Saurabh Ghosh * Derivative products like futures and options on Indian stock markets have become important instruments of price discovery, portfolio diversification and risk hedging in recent times. This paper studies the impact of introduction of index futures on spot market volatility on both S&P CNX Nifty and BSE Sensex using ARCH/GARCH technique.

Why do they call these contracts derivatives? Where is the optionality in these contracts? Weather derivatives structures commonly used are: i) cap - a call option; ii) Floor - a put option; iii) Collar - a put and a call option, usually with little or no premium; iv) Swap - a derivative with a profit and loss profile of a futures contract v) Digital option - an option that pays either a predetermined amount if acertain temperature or degree day level is reached, or nothing at all in other

CALCULATOR SECTION 1. For find at the point (3, 4) on the curve. A. B. C. D. E. 2. Suppose silver is being extracted from a mine at a rate given by , A(t) is measured in tons of silver and t in years from the opening of the mine. Which is an expression for the amount of silver extracted from the mine in the first 5 years of its opening? A. B. C. D. E. 3. Joe Student 's calculus test grades (G) are

Financial Derivatives Various Types and Pricing of Forward Contracts   Contents 1. Introduction.............................................................................................................................3 2.1 Futures...................................................................................................................................4 2.2 Options....................................................................................................................

it should come as no surprise that derivatives are so popular since many of the same people who work in Wall Street are betting at sports books. The Oracle of Omaha weighs in Warren Buffet is unquestionably one of the most admired and successful investors in the world. He is also the richest so his opinions carry some weight. Here is what he said about derivatives in the annual report of his securities firm, Berkshire Hathaway in 2002. "I view derivatives as time bombs, both for the parties

Derivatives are financial contracts whose price is either linked to the price of an underlying asset, commodity, rate, index or the occurrence or significance of a certain event. The phrase derivative originated from how the price of these contracts is derived from the price of some underlying commodity, security or index or the magnitude of an event. The set of financial instruments that include futures, forwards, options and swaps are referred to by the term Derivative. A derivative can be combined

DERIVATIVE is a transaction or contract whose value depends on or, as the name implies, derives from the value of underlying assets such as stock, bonds, mortgages, market indices, or foreign currencies. One party with exposure to unwanted risk can pass some or all of the risk to a second party. The first party can assume a different risk from a second party, pay the second party to assume the risk, or, as is often the case, create a combination. Derivatives are normally used to control exposure

Frequently Asked Questions on Derivatives Trading At NSE NATIONAL STOCK EXCHANGE OF INDIA LIMITED Derivatives Trading QUESTIONS & ANSWERS 1. What are derivatives? Derivatives, such as futures or options, are financial contracts which derive their value from a spot price, which is called the “underlying”. For example, wheat farmers may wish to enter into a contract to sell their harvest at a future date to eliminate the risk of a change in prices by that date. Such a transaction