interpret futures options and swaps

/in /by

For this task, you will write a paper that includes a spreadsheet to compare futures, options, and swaps. Include the following in your paper:

  • Formulate how you could use each of these derivative securities in a speculative and in a hedging mode.
  • Illustrate the concepts with numerical examples and describe the benefits of using each relative to the other.
  • Compare and contrast the Black-Scholes option pricing model and the binominal option pricing model
  • Break down the six inputs (including the dividend adjustment) to the Black-Scholes option pricing model.
  • Incorporate the important concepts of Delta, Gamma, and Vega.
  • Analyze how increases or decreases to each of the six inputs affect the value of put and call options.
  • Define and discuss the critical inputs to valuing futures and swaps.

Length: 5-7 pages, not including title and reference pages

References: a minimum of 3 resources