# Class Notes for FIN 3506 at Temple University

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## FIN 3506 Lecture Notes - Lecture 2: S&P 500 Index, Futures Exchange, Sweet Crude Oil

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Futures contracts are just agreements to make delivery and take delivery of a specific quantity and quality of an underlying asset. It should be noted

View Document## FIN 3506 Lecture Notes - Lecture 13: Day Count Convention, Currency Swap, Libor

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Learning objectives: understand the basics of plain vanilla interest rate swaps. Assuming settlement is 6 months and libor is 10% A pays b (10 + 2)/(2)

View Document## FIN 3506 Lecture Notes - Lecture 4: Effective Interest Rate, Repurchase Agreement, Eurodollar

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Interest rates are the cost of borrowing money. The con be thought of as the amount of rent fro the use of money. Rates are specific to the type of mar

View Document## FIN 3506 Lecture Notes - Lecture 11: Risk-Free Interest Rate, Delta Gamma, Stochastic Differential Equation

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One of the most interesting aspects of options is how a financial institution that has written an option will be able to hedge the risks. Black-scholes

View Document## FIN 3506 Lecture Notes - Lecture 1: New York Mercantile Exchange, Spot Contract, Futures Contract

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Learning objectives: understand what a futures contract is, it uses and its history, understand the concept of an options contract, know the different

View Document## FIN 3506 Lecture Notes - Lecture 7: Risk-Free Interest Rate, Put Option, Call Option

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Learning objectives: understand the bounds for a stock option, learn and be able to apply put/call parity, the effects of dividends on the bounds of op

View Document## FIN 3506 Lecture Notes - Lecture 9: Rational Pricing, Risk-Free Interest Rate, Put Option

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The following is a little different approach than that of you text but results in the same answers. The equations present in the text solve the general

View Document## FIN 3506 Lecture Notes - Lecture 5: Risk-Free Interest Rate, Arbitrage, Cash Flow

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Asset that are pieces of paper that represent claims that are held by a significant number of investors. Examples: stocks bonds mutual funds etc: consu

View Document## FIN 3506 Lecture Notes - Lecture 6: Strike Price, Call Option, Option Style

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An option gives the holder the right (not the obligation) to buy/sell something (called the underlying asset) at a fixed price (called the strike price

View Document## FIN 3506 Lecture Notes - Lecture 14: Confidence Interval, Standard Deviation, Justice Of The Peace

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Recently there has developed a need to establish a single number that gives senior management a summarization of the overall risk faced by the firm. Th

View Document## FIN 3506 Lecture Notes - Lecture 3: Futures Exchange, Futures Contract, Spot Contract

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Hedging is the process of reducing the risk in a cash market position by using futures contracts. To do this you take the opposite position in the futu

View Document## FIN 3506 Lecture 12: Notes_12_Derivatives

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Portfolio insurance is the protection on the downside of the value of a portfolio. This is the same as buying a put option and this is just how it is d

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