Paper No. 16 Derivatives Analysis

UNIT DESCRIPTION This paper is intended to equip the candidate with the knowledge and skills that will enable him/her to analyse and trade in the various types of derivative investments. LEARNING OUTCOMES • Demonstrate an understanding of the features, structure and operations of derivatives markets • Develop a framework for pricing various types of derivatives • Value derivative instruments using discrete time and continuous time valuation principles. • Price and hedge interest rate swaps • Use financial derivative instruments for managing and hedging portfolio risk. • Apply the framework for risk management so as to enable identification, assessment and control of numerous sources of risk