MARKETING DERIVATIVES

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SUMMARY

This module enables participants to compare and contrast derivative products. Special attention is focused on the trade–offs of the product spectrum and typical client reactions. The choice of multiple solutions to hedging problems is stressed.

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OBJECTIVES

Upon completion of this module, participants will be able to:

1. Describe the workings of:

¨ Swaps
¨ Futures/FRAs
¨ Options

2. Quantify hedging results using each product.

3. Compare all–in results across the product spectrum.

4. Identify the trade–offs to the client.

5. Calculate costs of each hedging structure.

6. Present a matrix of solutions to the client.

7. Anticipate client objections and deliver marketing strategy.

8. Highlight value added of each product.

9. Stress bank capabilities across product spectrum.

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