Financial Derivatives- financial instruments whose value depends onm other basic instruments, such as stocks or bonds- have emerged as imporatnat risk-mangement tools in the corporate world. Financial Derivatives offers a broad overview of the different types of derivatives (futures, options on futures, and swaps), while focussing on the principles that determine market prices. This introduction presents financial derivatives as tools for managing risk in a corporate setting, rather than instruments of speculation. The approach reflects today's emergence of corporations and financial institutions as dominant forces in finacial derivative markets. A new chapter, Risk Management and Financial Engineering, reflects the maturation of financial engineering as a financial specialty and illustrates how financial engineers use derivatives to manage risk.
Table of Contents
1. Introduction. 2. Futures. 3. Options. 4. The Swaps Market. 5. Synthesizing and Transforming Securities. 6. Risk Management and Financial Engineering.
Professor Robert W. Kolb taught investments at the University of Miami until 1996. He is the author and editor of over a dozen books and numerous articles on finance and investments. Kolb currently devotes his time to writing and research, especially in the areas of futures markets, investments and bond portfolio management.