Course Category

Forwards & Futures - Online

This course expands on the introductory information provided in Derivative Instruments to present a more in–depth look at forwards and futures. It explores the definitions, pricing and applications of the different types of contracts, including forward rate agreements (FRAs), short–term interest rate futures, bond and note futures, and stock index futures. The course also explains the different types of risk associated with forwards and futures.

This is an asynchronous eLearning course that can be accessed 24/7 from any internet enabled computer. Subscription period for this course is 90 days.

• Identify the similarities between forwards and futures.
• Recognize the components of the forward price.
• List the credit risks involved in forwards and futures transactions.
• Identify the differences between forwards and futures.
• Describe how interest accrues on forward rate agreements.
• Identify key factors necessary to hedge with an FRA.
• Identify the uses of FRAs in speculating.
• Describe the forward curve and how it is constructed.
• Identify short-term interest rate future specifications.
• Recognize the different applications of short-term interest rate futures.
• Describe what basis risk is and how it is determined
• Recognize how strips are used to create synthetic futures rates and to price other derivative products
• Identify the standard elements of note and bond futures
• Define the function of the conversion factor
• Describe how the cash and carry process determines bond futures pricing
• Recognize the methods for identifying Cheapest To Deliver bonds
• Identify the two measures of bond risk as they're related to hedging
• Define the methods used to weight an index
• Identify characteristics of stock index future contracts
• Describe how to adjust the hedge ratio for beta.
• Identify the risks associated with forwards and futures.