OPTION PREMIA
INTRINSIC VALUE AND TIME VALUE
TIME VALUE OF AMERICAN OPTIONS
TIME VALUE AT EXPIRATION
PUT-CALL PARITY
IMPLICATIONS FOR THE TIME VALUE
PUT-CALL PARITY WITH DIVIDENDS
IMPLICATIONS FOR THE TIME VALUE
A VERY IMPORTANT PROPERTY FOR AMERICAN CALLS
EARLY EXERCISE OF OPTIONS: AN ANALYSIS
PROFIT PROFILES
SPECULATION WITH OPTIONS
HEDGING WITH OPTIONS
VALUATION
THE BINOMIAL OPTION PRICING MODEL
THE TWO-PERIOD MODEL
VALUATION OF EUROPEAN PUT OPTIONS
VALUING AMERICAN OPTIONS
IMPLEMENTING THE BINOMIAL MODEL IN PRACTICE
THE BLACK-SCHOLES MODEL
PUT-CALL PARITY
INTERPRETATION OF THE BLACK-SCHOLES FORMULA
THE GREEKS
OPTION STRATEGIES
FUTURES OPTIONS
PUT-CALL PARITY
THE BLACK MODEL
NOTES
16 CHAPTER 8: Foreign Exchange INTRODUCTION CURRENCY CODES BASE AND VARIABLE CURRENCIES DIRECT AND INDIRECT QUOTES EUROPEAN TERMS AND AMERICAN TERMS BID AND ASK QUOTES APPRECIATING AND DEPRECIATING CURRENCIES CONVERTING DIRECT QUOTES TO INDIRECT QUOTES POINTS RATES OF RETURN THE IMPACT OF SPREADS ON RETURNS ARBITRAGE IN SPOT MARKETS ONE-POINT ARBITRAGE TWO-POINT ARBITRAGE TRIANGULAR ARBITRAGE CROSS RATES MARKET RATES AND EXCHANGE MARGINS VALUE DATES THE FORWARD MARKET OUTRIGHT FORWARD RATES SWAP POINTS BROKEN-DATED CONTRACTS COVERED INTEREST ARBITRAGE A PERFECT MARKET FOREIGN EXCHANGE SWAPS THE COST THE MOTIVE INTERPRETATION OF THE SWAP POINTS A CLARIFICATION SHORT-DATE CONTRACTS OPTION FORWARDS NONDELIVERABLE FORWARDS RANGE FORWARDS FUTURES MARKETS HEDGING USING CURRENCY FUTURES A SELLING HEDGE A BUYING HEDGE EXCHANGE-TRADED FOREIGN CURRENCY OPTIONS SPECULATING WITH FOREX OPTIONS EXCHANGE RATES AND COMPETITIVENESS NOTES
17 CHAPTER 9: Mortgages and Mortgage-backed Securities INTRODUCTION MARKET PARTICIPANTS MORTGAGE ORIGINATION RISKS IN MORTGAGE LENDING OTHER MORTGAGE STRUCTURES PSA PREPAYMENT BENCHMARK ANALYSIS EXTENSION RISK AND CONTRACTION RISK ACCRUAL BONDS FLOATING RATE TRANCHES NOTIONAL INTEREST-ONLY TRANCHE INTEREST-ONLY
