SOLUTIONS MANUAL For Derivatives Markets 3rd Edition By Robert Mcdonald (All Chapters, 100% Original Verified Grade A+)

SOLUTIONS MANUAL
For Derivatives Markets 3rd Edition By Robert
Mcdonald (All Chapters, 100% Original Verified
Grade A+)

, SOLUTIONS MANUAL


FOR

DERIVATIVES MARKETS

THIRD EDITION




ROBERT L. MCDONALD

,CONTENTS
CHAPTER 1 INTRODUCTION TO DERIVATIVES.............................................................................. 1

PART ONE INSURANCE, HEDGING, AND SIMPLE STRATEGIES
CHAPTER 2 AN INTRODUCTION TO FORWARDS AND OPTIONS................................................ 8
CHAPTER 3 INSURANCE, COLLARS, AND OTHER STRATEGIES............................................... 22
CHAPTER 4 INTRODUCTION TO RISK MANAGEMENT ............................................................... 44

PART TWO FORWARDS, FUTURES, AND SWAPS
CHAPTER 5 FINANCIAL FORWARDS AND FUTURES .................................................................. 69
CHAPTER 6 COMMODITY FORWARDS AND FUTURES ............................................................... 83
CHAPTER 7 INTEREST RATE FORWARDS AND FUTURES .......................................................... 92
CHAPTER 8 SWAPS ............................................................................................................................ 107

PART THREE OPTIONS
CHAPTER 9 PARITY AND OTHER OPTION RELATIONSHIPS .................................................... 116
CHAPTER 10 BINOMIAL OPTION PRICING: BASIC CONCEPTS .................................................. 128
CHAPTER 11 BINOMIAL OPTION PRICING: SELECTED TOPICS ................................................ 147
CHAPTER 12 THE BLACK-SCHOLES FORMULA ........................................................................... 170
CHAPTER 13 MARKET-MAKING AND DELTA-HEDGING............................................................ 193
CHAPTER 14 EXOTIC OPTIONS: I ..................................................................................................... 209

PART FOUR FINANCIAL ENGINEERING AND APPLICATIONS
CHAPTER 15 FINANCIAL ENGINEERING AND SECURITY DESIGN .......................................... 219
CHAPTER 16 CORPORATE APPLICATIONS .................................................................................... 230
CHAPTER 17 REAL OPTIONS ............................................................................................................. 242

PART FIVE ADVANCED PRICING THEORY
CHAPTER 18 THE LOGNORMAL DISTRIBUTION .......................................................................... 254
CHAPTER 19 MONTE CARLO VALUATION .................................................................................... 260
CHAPTER 20 BROWNIAN MOTION AND ITO’S LEMMA .............................................................. 270
CHAPTER 21 THE BLACK-SCHOLES-MERTON EQUATION ........................................................ 277
CHAPTER 22 RISK-NEUTRAL AND MARTINGALE PRICING ...................................................... 285
CHAPTER 23 EXOTIC OPTIONS: II .................................................................................................... 295




.

, IV CONTENTS


CHAPTER 24 VOLATILITY ................................................................................................................. 307
CHAPTER 25 INTEREST RATE AND BOND DERIVATIVES .......................................................... 328
CHAPTER 26 VALUE AT RISK ........................................................................................................... 342
CHAPTER 27 CREDIT RISK................................................................................................................. 350