To support you and your education, BCIT is adapting applied learning in formats appropriate to the unfolding global situation. All PTS classes are being delivered in an online format unless you are notified otherwise.
Derivatives have become increasingly important and fundamental in effectively managing financial risk and creating exposures to asset classes. This course builds the conceptual framework for understanding derivative investments (forwards, futures, options, and swaps), derivative markets, and the use of options in risk management.
This course isn't currently offered through BCIT Part-time Studies. Please check back next term or subscribe to receive email updates.
At the end of this course the student will be able to:
Calculate an arbitrage
Describe how an arbitrage determines prices and promotes market efficiency
Calculate and interpret the payoff of an FRA
Outline the characteristics of currency forward contracts
Outline price limits and the process of marking to market
Compute and interpret the margin balance, given the previous day’s balance and the change in the futures price
Assess interest rate caps, floors, and collars
Compute and interpret option payoffs
Evaluate intrinsic value and time value
Calculate and interpret the lowest prices of European and American calls and puts based on the rules for minimum values and lower bounds
Generate the value at expiration, profit, maximum profit, maximum loss, breakeven underlying price at expiration, and general shape of the graph of the strategies of buying and selling calls and puts
Evaluate the value at expiration, profit, maximum profit, maximum loss, breakeven underlying price at expiration, and general shape of the graph of a covered call strategy and a protective put strategy, while considering the risk management application
Effective as of Fall 2011
FMGT 8100 is offered as a part of the following programs: