3.1 Determination of Forward and Futures prices Chapter 3 Options Futures, and other Derivatives, 5th edition C 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.1 Determination of Forward and Futures Prices Chapter 3
3.2 Consumption vs Investment Assets Investment assets are assets held by significant numbers of people purely for investment purposes(EXamples: gold silver) Consumption assets are assets held primarily for consumption(Examples copper, oil) Options Futures, and other Derivatives, 5th edition C 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.2 Consumption vs Investment Assets • Investment assets are assets held by significant numbers of people purely for investment purposes (Examples: gold, silver) • Consumption assets are assets held primarily for consumption (Examples: copper, oil)
3.3 Short selling (Page 41-42 Short selling involves selling securities you do not own Your broker borrows the securities from another client and sells them in the market in the usual way Options Futures, and other Derivatives, 5th edition C 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.3 Short Selling (Page 41-42) • Short selling involves selling securities you do not own • Your broker borrows the securities from another client and sells them in the market in the usual way
3.4 Short selling (continued At some stage you must buy the securities back so they can be replaced in the account of the client You must pay dividends and other benefits the owner of the securities receves Options Futures, and other Derivatives, 5th edition C 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.4 Short Selling (continued) • At some stage you must buy the securities back so they can be replaced in the account of the client • You must pay dividends and other benefits the owner of the securities receives
3.5 Measuring Interest rates The compounding frequency used for an interest rate is the unit of measurement The difference between quarterly and annual compounding is analogous to the difference between miles and kilometers Options Futures, and other Derivatives, 5th edition C 2002 by John C. Hull
Options, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 3.5 Measuring Interest Rates • The compounding frequency used for an interest rate is the unit of measurement • The difference between quarterly and annual compounding is analogous to the difference between miles and kilometers