Options, Futures and Other Derivatives Ch10 Part 1



Options, Futures, and Other Derivatives Ninth edition Hull, John Publisher: Pearson.

10 thoughts on “Options, Futures and Other Derivatives Ch10 Part 1”

  1. Sorry Prof. I watched another video from youtube regarding the SWAP, and I have a question really need your help, can you spend couple mins and take a look and answer my following questions? https://www.youtube.com/watch?v=uVq384nqWqg
    Thank you in advance!

    At 13:00 of the above link, here's my question, before the Swap, total interest payment is: 7% (From Co. A to bank A)+ (LIBOR +1%) (From Co. B to Bank B)= 8%+ LIBOR
    After the Swap, total interest paid: (LIBOR -1%) (From Co. A) + 9.5% (From Co. B) + 0.5%( To the SWAP Bank) = 9% + LIBOR
    Who paid for the extra 1% here? Isn't just not making sense to me how this would benefit everyone but without an loser in the SWAPs at all.
    One's gain must be from another's loss, right? Where is SWAPS' 0.5% profit coming from?

  2. You mentioned in one of the videos a question that " the number of options contracts sometimes exceeds the number of underlying shares and then it brings up an interesting question that what happens if all of option holders want to exercise their options to buy /sell the underlying stock".. well what happens in such a scenario?

  3. Hey Mark, do I need to watch these Options, Futures and Other Derivatives Ch10 videos for CFA Level 1? Thanks. I see you put them in the playlist

  4. If the seller of the Credit Default Swap is willing to take on the entire risk of the bond failing, what purpose does the lender have? It seems more efficient for the seller of the credit default swap to directly lend to or just buy the bond outright.

  5. Is this in lieu of the beginning of reading 59? I remember you saying you were leveraging your efforts with other videos, just making sure… thanks!

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