FIN62004 Derivatives and Financial Market Assignment Guidelines by Professional Finance Experts
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- Referencing Styles : Open
- Course Code: FIN62004
- Course Title: Derivatives
- Words: 1200
- University: Open University Malaysia
- Country: MY
According to the Futures industry Association’s (FIA) data, the first six months of 2020, global futures and options trading had grown 32% year-on-year (y-o-y) to a record 21.9 billion contracts, with Asia-Pacific registering the largest increase due to strong interest in the derivatives exchanges in India and China. From an asset class perspective, the equity markets contributed the most to the global surge in trading activity. This was followed by interest rates, currencies, energy, and agriculture. In Malaysia, the contract volumes on Bursa Malaysia Derivatives (BMD) in the first half of 2020 also saw significant growth, rising 60% y-o-y, with the two most popular products, crude palm oil futures (FCPO) and FTSE Bursa Malaysia KLCI Futures (FKLI) volumes growing 62% and 72%, respectively. Despite of pandemic Covid19, the global uncertainty gives rise to more volatility and that will benefit the derivatives market. You are required to examine the relationship between risk exposures and financial derivatives contracts from Bursa Malaysia Derivatives. Assignment Question Guidelines: 1.) Go to https://www.bursamalaysia.com/market_information/market_statistic/derivatives 2.) Choose any THREE derivatives products [e.g. Gold Futures (FGLD), Tin Futures (FTIN), Crude Palm Oil Futures (FCPO)] 3) Download the information related to the selected products [e.g. historical prices, monthly statistics] 4) Calculate the daily or weekly return of each selected product from Jan 2020 to Feb 2021. 5) Determine the relationship of the selected derivative products with systematic risk exposures (e.g. market risk, interest rate risk, exchange rate risk, credit risk and crisis). You may apply multiple regression model to measure the relationship. 6) Discuss the role of derivatives product in the efficiency of the financial market.