BBMF2073 FOREX AND DERIVATIVES

Tutorial 1: Introduction and Overview of Derivatives

Question 1

Briefly explain the derivative instrument, and how is it different from stocks and bonds.

Question 2

Discuss the key categories of players in derivatives markets, and briefly describe the objective of
each category of players.

Question 3

Explain how might the absence of speculators/speculation hurt hedgers.

Question 4

Using appropriate example, differentiate between commodity and financial derivatives.

Question 5

Explain the benefit(s) do arbitrageurs and speculators bring to derivatives markets.

Question 6

Explain the types of risk associated with derivatives.