Class Notes (839,469)
Canada (511,354)
York University (35,583)
ADMS 4503 (13)
Lecture

Lecture1.docx

2 Pages
89 Views

Department
Administrative Studies
Course Code
ADMS 4503
Professor
Nabil Tahani

This preview shows 80% of the first page. Sign up to view the full 2 pages of the document.
Description
LECTURE 1 Derivatives : options/ futures – depend on stock price and other factors – maturity, sigma, etc Note: it could be a primary asset as well Reasons to play derivatives : speculate/ hedge/ arbitrage Diff between insurance and insurance against derivatives ? Answer: no secondary market for insurance Exchange traded market OTC Standardized Not standardized Default free : as counter party is the exchange Default Not flexible Flexible Swaps: IRS ( interest rate swaps) A has loan with bank at LIBOR ( London interbank offer rate : benchmark for rate viable Its fixed 1 period before date Now say interest rate is assumed to increase, but A cannot change the deal. You can swap A would pay fixed 5% to B for LIBOR so interest rate for A would change from floating to fixed A ------------ loan-------------- bank Swap: -------------- LIBOR----------- A -------------- 5% ----------------- B ----------------------LIBOR ------ The following matures on the
More Less
Unlock Document

Only 80% of the first page are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit