Options and Futures in International Portfolio Management

Options and Futures in International Portfolio Management is an indispensable learning resource and an invaluable reference to the practical application of derivative instruments in risk management. It is designed to educate and train its readers in the theory and application of options, futures and swaps to financial risk management, with particular emphasis on the application to international portfolio management.
The analysis of futures and forward contracts covers equity indices, currencies, interest rates and bonds. The applications of futures and forwards include hedging, speculation and arbitrage. In addition, there is an analysis of the role of equity index futures and also of bond futures in the creation of synthetic index funds that have the potential to out perform traditional index funds.
The analysis of options covers the same asset classes as the futures, but with the addition of equities. Particular emphasis is placed upon the sensitivities of the option valuation, the delta, gamma, theta vega and rho. The importance of these sensitivities in the management of risk within portfolios is emphasized, particularly in the discussion of the various option strategies.
The analysis of swaps covers the pricing and valuation of interest rate and currency swaps, as well as equity swaps and commodity swaps. Swaptions are also analysed.
This book is unashamedly an education and training tool, aimed simultaneously at practitioners and students. Fund managers and treasury managers will find it an engaging and helpful guide to the management of risk with these instruments, which are increasingly important in providing a competitive edge. Management consultants and accountants will value the book as a sympathetic guide to this complex, but increasingly significant, area of their business. Final year undergraduate and postgraduate students in accounting and finance, students on the finance streams of business studies courses and economics courses, as well as those on MBA and post experience courses, will welcome this text which explains the role of these increasingly important instruments.