In direct contrast to most existing derivatives books which emphasize issues related to the pricing and hedging
of derivatives and are intended more to train traders, not managers, this groundbreaking book is designed for those
who want to teach managers how to use derivatives to maximize firm value through risk management. This book presents
the crucial tools necessary for executives and future derivatives players to effectively hedge with derivatives
in order to protect firms from losses. Coverage includes all the pricing tools that are necessary for those who
seriously intend to use derivatives as well as the necessary tools to evaluate how to use a particular derivative
to reduce risk. Rather than focusing on an array of possible derivatives, the book is much more concerned about
teaching a general approach to use derivatives so that students know how to use existing derivatives for risk management
as well as derivatives that do not yet exist.
Benefits:
Readable, practical text: Great fit for a first course in derivatives at the undergraduate or graduate level.
Written to emphasizes the role of managers: Managers will use derivatives to maximize firm value as opposed
to traders who may use derivatives to speculate.
Has a full compliment of pedagogy: Includes chapter objectives, summary, "key concepts," questions,
and exercises.
Applications boxes: Chapter concepts are applied to real-world examples.
Technical boxes: Concepts presented within the chapters are taken to a further level of conceptual or mathematical
rigor.
Table of Contents
1. Introduction to Derivatives.
2. Investors, Derivatives and Risk Management.
3. Creating value with risk management.
4. An integrated approach to risk management.
5. Forward and futures contracts.
6. Hedging exposures with forward and futures contracts.
7. Optimal hedges for the real world.
8. Identifying and managing cash flow exposures.
9. Hedging with options.
10. Option pricing, dynamic hedging, and the binomial model.
11. The Black-Scholes model.
12. Risk measurement and risk management with nonlinear payoffs.
13. Options on bonds and interest rates.
14. The demand and supply for derivative products.
15. Swaps.
16. Using Exotic Options.
17. Credit risks and credit derivatives.
18. The practice of risk management: Recent and future developments.