TUTORIAL 1

This will be a general discussion week on the topics relevant to the Intro to Derivatives.

Questions:

1. Explain what do you understand about Financial Derivatives?

a. Give your understanding based on lectures.

2. What are the main derivatives contracts available?

a. Forward

b. Futures

c. Options

d. Swap

3. What is your perception on derivative contracts as investment risk neutralizing instruments?

a. In the hedgers’ perceptive – give your understanding in the hedgers’ position.

4. Booking a fight ticket that you will be using next December 2022 is a Forward contract or Futures
contracts?
a. Debatable
i. Forward
1. Purchase directly from the airline website
2. Air Asia “no money” to refund flight cancellation during covid
ii. Future
1. A ranged of timing and location
2. Could be exercise early or later for premium ticket
3. Purchasing ticket via a platform – klook, agoda, etc
4. Not customizable unless a private jet

5. Can derivatives be used for making huge profits?

a. Yes, High risk high return!

6. What are the possible dangers post by derivatives?

a. High risk high return, so when can be huge profit definitely could be high losses.

End of Questions