3-) What are the advantages of a currency options contract as a hedging tool compared with the forward contract?

h) discuss the relationship between the prices of puts, calls, and forward/futures contracts on the same underlying asset using the put-call-forward/futures parity.      i) discuss the boundary conditions on the prices of American and European call option contracts on futures.       j) explain and discuss the use of interest rate parity in pricing foreign currency forwards and futures.      k) describe how spot prices are determined using the cost-of-carry model.

a)explain how to price a currency swap if either set of payments is at a floating rate.       b)explain how a currency swap can be used to convert a loan in one currency into a loan in another currency, and provide some reasons for doing so.      c)demonstrate that a currency swap contract is equivalent to a series of forward contracts.       d)explain how a currency swap can be used to hedge a stream of foreign cash flows.     e)define interest rate derivatives, and compare and contrast them against bond derivatives.

F2