describe the major differences between futures and forwards. b)describe delivery and settlement in derivative markets. c)describe financial engineering and hybrids. d)discuss the three presuppositions for a well-functioning financial market.
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a)describe the major differences between futures and forwards.
b)describe delivery and settlement in derivative markets.
c)describe financial engineering and hybrids.
d)discuss the three presuppositions for a well-functioning financial market.
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Solved in 5 steps
- 1) Financial markets may be categorized as? A). debt securities markets B). Equity securities markets C). Derivative securities markets D). Foreign exchange markets. Required : Please answer this question by choosing the correct option.Differentiate between the following types of markets: physical asset vs. financial markets, spot vs. futures markets, money vs. capital markets, primary vs. secondary markets, and public vs. private marketsDifferentiate between each of the following pairs of terms. a. Money market and capital market b. Primary market and secondary market c. Broker market and dealer market
- 2. summarize the key features of the markets with the guide questions below. Features Equity Market Fixed-Income Market Types of Securities Traded Accessibility of the Market Levels of Risk Expected Returns Goals of Investors Strategies Used by Market Participants Example marketsDescribe the main characteristics of the capital and money markets, with particular reference to the instruments traded on these markets and the basic principles of valuation which are used to price these instruments.This is a generalized framework for analyzing the relationship between risk and return: a. capital asset pricing model b. diversification theory c. capital market line d. arbitrage pricing theory
- Distinguish between (3) money and capitalmarketsa)describe the role of forward markets and futures markets in price discovery. b)discuss three major operational advantages provided by derivative markets. c)distinguish between derivative markets and gambling on the basis of benefits to society. d)describe the three ways in which derivatives can be misused.Tabulate and explain each drivers that affect the financial market and identify the risks that may arise. 1. Competiveness 2. Market Behavior
- a)define interest rate swaptions, and differentiate between payer swaptions and receiver swaptions. b)define forward swaps. c)define risk management. d)discuss reasons for practicing risk management. e)discuss how firms can benefit from risk management.(i) Discuss the role of the three main categories of participants in derivative markets. (ii)Evaluate a strategy likely to be taken by each category of the participant and discuss the potential outcomes.a) Define Forwards and Futures. b)Explain the differences between these instruments and how these derivatives are used to mitigate risk. nb: answer question a and b