Lecture 09 - Hedging and Use of Derivatives

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Print notes and solutions for Chapter 8 (see file below) and bring to class. EXAM - Be able to do problems similar to Chapter 8 Problems, calculate the price of a future, and know the major characteristics related to the use of derivatives by banks.

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Do not print but the following article (see p. 52 of article) will be discussed in class, “The Euro Interest Rate Swap Market,” BIS Quarterly Review, March 2003 at www.bis.org/publ/qtrpdf/r_qt0303f.pdf to see the interaction of the major world banks.

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