- Currency swaps.
- Commodity futures and financial futures.
Faculty may use visual aids Nos. 41 - 46 to explain the objective and the points related to
derivatives.
Visual aid 41 - Derivatives
Derivatives
Objectives
- Reasons for risk management
- Background of derivatives
- Option theory
- Black-Scholes model
- Forward contracts
- Hedging and future contracts
- Swaps
- Uses of Derivatives
Faculty may use the information provided in the reading material for Learning
Unit 6 in order to introduce the overall objectives of the module.
Visual aid 42 - Risk Management
Risk Management
- Debt capacity
- Maintaining the optional Capital budget over time.
- Financial distress
- Comparative advantage in hedging.
- Borrowing costs
- Tax effects.
- Compensation systems.
Faculty may use the information provided in the reading material for Learning
Unit 6 in order to develop the presentation