Week 4 — April 24: Derivatives Overview — Forwards, Futures & Options Payoffs

Topics: Derivatives overview, forwards and futures, options payoffs

Assignment Due: Group Strategy Proposal 1 — Fixed Income Investment Strategy Proposal (30 points)

Key Concepts

• Forward and futures contracts: pricing, margin, and settlement
• Options: calls, puts, payoff diagrams, intrinsic vs. time value
• Put-call parity
• Exchange-traded vs. OTC derivatives