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FMGT 8100 - Derivatives

Financial Management Part-time Studies Course

School of Business

Course Details

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.

Prerequisite(s)

FMGT 8030 and FMGT 8060

Credits

4.0

This course isn't currently offered through BCIT Part-time Studies. Please check back next term or subscribe to receive email updates.

Learning Outcomes

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

Related Programs

FMGT 8100 is offered as a part of the following programs:

School of Business

  1. Financial Analyst
    Part-time   Advanced Certificate

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