Amity Campus

Uttar Pradesh
India 201303

Subject Name
Study COUNTRY
Roll Number (Reg.No.)
Student Name

ASSIGNMENTS
PROGRAM: MFC
SEMESTER-IV
: Financial Engineering
: Somalia
: MFC001512014-20160164
: Kenadid Ahmed Osman

INSTRUCTIONS
a) Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C

DETAILS
Five Subjective Questions
Three Subjective Questions +
Study
Objective or one line Questions

MARKS
10
Case 10
10

b)
c)
d)
e)

Total weightage given to these assignments is 30%. OR 30 Marks

All assignments are to be completed as typed in word/pdf.
All questions are required to be attempted.
All the three assignments are to be completed by due dates and need to be
submitted for evaluation by Amity University.
f) The students have to attached a scan signature in the form.

Signature
Date

:
:

______
_______

_______
28-04-2014_____________ __

( ) Tick mark in front of the assignments submitted

Assignment A

Assignment B

Assignment C

Financial Engineering
ASSIGNMENT A
QI. A swap bank has to entail certain risks which are inherent to the swap business
and are interrelated Explain the risks involves in swap business.
Answer:
While the earnings of the swap bank are from the bid-ask spread of swaps and
the fees charged (upfront fees), it has to entail the following risks, which are inherent
to the swap business and are mostly inter-related:
I. Interest Rate Risks: Interest rate risk arises mostly on fixed rate legs of swaps.
While the floating rate interest can be periodically adjusted to the prevailing
interest rates, the fixed rate in the market not accompanied by a change in the
yield of debt instruments of the same time period as the interest rates will entail
interest rate losses to the bank. Unless the swap bank is fully hedged, losses will
be incurred.
II. Currency Exchange Risk: Currency exchange risks happen when there is an
exchange rate commitment given to one party and there is a steep change in the
exchange rate between the currencies in the swap. If the swap bank is not able
to match the counterparty well in time, it will incur losses due to the exchange
rate difference.
III. Market Risks: Market risks occur when there is difficulty in finding counterparty
to a swap. Usually, longer maturity swaps have less takers and vice versa. Lower
the number of takers, higher the risks of losses.
IV. Credit Risks: Credit risks are those risks which the swap bank has to bear in case
the counterparty to a swap defaults on payment due to bankruptcy or any other
defaults, legal or otherwise. The bank continues to the obliged to pay the other
party of the swap, irrespective of the fact whether the former party defaulted or
not. Market risks and credit risks together amount to default risks of the bank.
V. Mismatch Risk: Mismatch risks take place when the swap bank comes across
mismatches in the requirements of both counterparties to the swap. Usually,
banks have a pool of swaps and have no difficulty in finding matches, but if no
party is found, the risk of mismatch losses is there. This risk is further
aggravated in case one of the parties defaults.

VI. Basis Risks: Basis risks take place mostly in floating-to-floating rate swaps, when
both the sides are pegged to two different indices the sides are pegged to two
different indices and both the indices are fluctuating and there is no proper
correlation between both.
VII. Spread Risk: Spread risks happen when the spread changes over the time period
the parties are matched. The spread risk is not the same as interest rate risk, as
spreads may change as a result of change in basis points, while the interest rate
may still remain constant.
VIII. Settlement Risk: Settlement risks take place when the payments of currency
swaps are made at different times of the day mainly because of different
settlement hours in capital markets of two countries involved in the currency
swap. If a limit on the size of the settlement is placed for each day, this risk is
minimized.
IX. Sovereign Risk: Sovereign risks are those risks that can take place if a country
changes its rules regarding currency deals.
It mostly happens in the
underdeveloped or developing countries which tend to have more political
instability than the developed world.
Q2. Call options are said to be At the money , In the money and Out of the money
depending on whether the exercise price is equal to or less than or greater than the
current market price of the stock. In case of Put options, the opposite is true. Explain
when a trader realizes profits in case of Call as well as Put options with the help of
simple examples.
Answer:
Call Option
A call option is an option contract in which the buyer has the right but not the
obligation to buy a specified quantity of a security at a specified price within a fixed
period of time. For the seller of a call option, it represents an obligation to sell the
underlying security at the strike price if the option is exercised. The call option writer is
paid a premium for taking on the risk associated with the obligation. Suppose a call
option with an exercise price equal to the price of the underlying (100) is bought today
for $1.
At expiry, if the securitys price has fallen below the strike price, the option will
be allowed to expire worthless and the position has lost $1. This is the maximum
amount that you can lose because an option only involves the right to buy or sell, not

the obligation. In other words, if it is not in your interest to exercise the option you
dont have to and so if you are an option buyer your maximum loss is the premium
you have paid for the right. BEP will be 101.
If, on the other hand, the securitys price rises, the value of the option will
increase by $1 for every $1 increase in the securitys price above the strike price (less
the initial $1 cost of the
Now look at the profit/loss for a short call.

Here profit is limited to the premium received for selling the right to buy at the
exercise price - again $1.
For every $1 rise in the price of the underlying security above the exercise price
the option falls in value by $1.
Here again, the breakeven point is 101.
Put Option
A put is the reverse of a call in that the value of the position rises as the price of
the underlying security falls.
Here is the profit/loss graph for a long put.

At expiry the put is worth nothing if the securitys price is more than the strike
price of the option but, as with the long call, the option buyers loss is limited to the
premium paid.
The breakeven for this option is 99, so the put purchaser makes money if the
underlying security is priced below 99 at expiry.
And here is the profit/loss graph for a short put.

Here profit is limited to the premium received for selling the right to sell at the
strike price.
For every $1 fall in the price of the underlying security below the strike price the
option falls in value by $1.
Here again, the breakeven point is 99.

Q3. Write short notes on

(a) LBO or (b) Corporate restructuring
Answer:
A) A Leveraged Buy-Out (LBO) is a transaction in which capital borrowed
from a commercial lender is used to fund a large portion of the purchase. Generally, the
loans are arranged with the expectation that the earnings of the business will easily
repay the principal and interest. The LBO potentially has great rewards for the buyers
who, although they frequently make little or no investment, own the tar- get company
free and clear after the acquisition loans are repaid by the earnings of the business.
LBOs are often arranged to enable the managers of subsidiaries or divisions of large
corporations to purchase a subsidiary or division which the corporation wants to divest,
known as an MBO, or management buy-out.
The LBO transaction will generally take one of two basic forms: the sale of assets
or the cash merger. Under the cash merger format, the acquired company disappears
upon merger into the acquiring company and its shareholders receive cash for their
shares. Under the sale of assets format, on the other hand, the operating assets
become part of the buying company but the selling company will generally be given the
option of either receiving cash or continuing to hold their shares in the selling company.
At the heart of the LBO transaction are the dynamics of financing the acquisition by
employing the assets of the acquired company as a basis for raising capital. Large
unused borrowing capacity is the characteristic which typically enables a purchaser to
use the sellers assets to borrow the purchase price.
B) Corporate Restructuring is the process of redesigning one or more aspects
of a company. The process of reorganizing a company may be implemented due to a
number of different factors, such as positioning the company to be more competitive,
survive a currently adverse economic climate, or poise the corporation to move in an
entirely new direction. Here are some examples of why corporate restructuring may
take place and what it can mean for the company.
Restructuring a corporate entity is often a necessity when the company has
grown to the point that the original structure can no longer efficiently manage the
output
and
general
interests
of
the
company.
For
example,
a corporate restructuring may call for spinning off some departments into subsidiaries
as a means of creating a more effective management model as well as taking

advantage of tax breaks that would allow the corporation to divert more revenue to the
production process. In this scenario, the restructuring is seen as a positive sign of
growth of the company and is often welcome by those who wish to see the corporation
gain a larger market share.
In general, the idea of corporate restructuring is to allow the company to
continue functioning in some manner. Even when corporate raiders break up the
company and leave behind a shell of the original structure, there is still usually the hope
that what remains can function well enough for a new buyer to purchase the diminished
corporation and return it to profitability.
Q4. Futures rely on a great deal on expected spot prices. The
theoreticalframework suggests that forward rates reflect the expected spot
rates. How futures differ from forwards? Explain.
Answer:
A forward contract is an agreement between two parties to buy or sell an
asset (which can be of any kind) at a pre-agreed future point in time at a pre-agreed
price. A futures contract is a standardized contract, traded on a futures exchange, to
buy or sell a certain underlying instrument at a certain date in the future, at a specified
price. So while the date and price are decided in advance in forward contract, a futures
contract is more unpredictable. They also differ in the forms that a futures contract is
standardized while a forward contract is made to the customer's need.
Standardization and exchange based trading of futures is the underlying reason
for most of the differences between a forward and future transaction. Even though it
may be intuitive that future trades are more constrained than forward trades and
should hamper efficient markets, the standardization of the contracts stimulates futures
market and enhances liquidity.
In contrast to forward contracts in which a bank or a brokerage is usually the
counterparty to the contract, there is a buyer and seller on each side of a futures trade.
The futures exchange selects the contract it will trade.
The distinguishing characteristics between forward contract and futures contract are
presented below:

SI.
No.
I.
2.

3.
4.
5.
6.
7.

Characteristics Forward Contract

Futures Contract

Contract Terms
,
Contract Price

Standardized contract

Decided by buyers and

sellers
Remains
constant
till
maturity
to Cannot be done

Changes every day

Marking
Done every day
Market
Margin
Not needed
Margin is to be paid by
Requirements
both buyers and sellers
Risk of Counter Exists
Does not exist
Party
Number
of No limit on the number ot Number of contracts limited
Contracts
contracts in a year
between 4 and 12 a year
Hedging

8.
9.

Liquidity
Operational
Mechanism

10.

Delivery

Tailor-made
contracts
makes possible perfect
hedging
No liquidity
Not traded on exchange
but traded over the
counter
Delivery is specifically
decided:
contracts usually result in
delivery

Since contract period is limited

to a month. hedging not
perfect
Highly liquid
It is exchange-traded

Standardized and cash delivery

of contracts

Q5. Arbitrage profits an investor told are risk less profits. You take simultaneous but
opposite positions in two markets to reap gains from pricing disparities. Acting on this
belief, his friend tried to find the arbitrage profit by trading simultaneously in futures
and stock index.
He has collected to the following information:
Pricing level of stock index _3000
Index futures priced at
2000
Risk free rate of return l0%p.a.
50% stocks are to pay dividcnds at 6%
The index futures has a multiple of 100
The future has six months to expiration.

Required
(a) Find arbitrage profits, if any.
(b) Discuss the risks associated with arbitrage transactions in futures.
Answer:
a)
F* = S (1+r-y)t
=3000(1+0.10-.06)0.5
=1560
We have F>F* i.e 2000>1560
If F > F*
Time

Action

Now:

At t

Cash Flow

Values

1. Sell Future Contract 0

2. Borrow Spot price of S
index at risk free
rate
3. Buy Stock Index
(-)S

0
3000@10
%

1. Collect dividends on S((1+y)t-1)

stock
2. Delivery on future F
contract
3. Pay back loan
-S(1+r)t

88.69

NCF

F-S(1+r-y)t > 0

(-)3000

2000
(-)1650
440

Arbitrage Profit = 440

F* = Theoretical futures price
(annualized)
F = Actual futures price
S = Spot level of index

r= Riskless rate of interest

t = Time to expiration on the futures
Contract
y = Dividend yield over lifetime of futures
Contract as % of current index level

b) Arbitrage transactions in modern securities markets involve fairly low day-today risks, but can face extremely high risk in rare situations, particularly financial crises,
and can lead to bankruptcy. Formally, arbitrage transactions have negative skew
prices can get a small amount closer (but often no closer than 0), while they can get
very far apart. The day-to-day risks are generally small because the transactions involve
small differences in price, so an execution failure will generally cause a small loss
(unless the trade is very big or the price moves rapidly). The rare case risks are
extremely high because these small price differences are converted to large profits via
leverage (borrowed money), and in the rare event of a large price move, this may yield
a large loss.
The main day-to-day risk is that part of the transaction fails execution risk.
The main rare risks are counterparty risk and liquidity risk that counterparty to a large
transaction or many transactions fails to pay, or that one is required to post margin and
does not have the money to do so.
In the academic literature, the idea that seemingly very low risk arbitrage trades might
not be fully exploited because of these risk factors and other considerations is often
referred to as limits to arbitrage.
Execution risk
Generally it is impossible to close two or three transactions at the same instant;
therefore, there is the possibility that when one part of the deal is closed, a quick shift
in prices makes it impossible to close the other at a profitable price. However, this is
not necessarily the case. Many exchanges and idbs allow multi legged trades (e.g. basis
block trades on LIFFE).
Competition in the marketplace can also create risks during arbitrage
transactions. As an example, if one was trying to profit from a price discrepancy
between IBM on the NYSE and IBM on the London Stock Exchange, they may purchase
a large number of shares on the NYSE and find that they cannot simultaneously sell on
the LSE. This leaves the arbitrageur in an un-hedged risk position.
In the 1980s, risk arbitrage was common. In this form of speculation, one
trades a security that is clearly undervalued or overvalued, when it is seen that the
wrong valuation is about to be corrected by events. The standard example is the stock
of a company, undervalued in the stock market, which is about to be the object of a
takeover bid; the price of the takeover will more truly reflect the value of the company,

giving a large profit to those who bought at the current priceif the merger goes
through as predicted.
Traditionally, arbitrage transactions in the securities markets involve high speed,
high volume and low risk. At some moment a price difference exists, and the problem is
to execute two or three balancing transactions while the difference persists (that is,
before the other arbitrageurs act). When the transaction involves a delay of weeks or
months, as above, it may entail considerable risk if borrowed money is used to magnify
the reward through leverage. One way of reducing the risk is through the illegal use of
inside information, and in fact risk arbitrage with regard to leveraged buyouts was
associated with some of the famous financial scandals of the 1980s such as those
involving Michael Milken and Ivan Boesky.
Counterparty risk
As arbitrages generally involve future movements of cash, they are subject to
counterparty risk: if counterparty fails to fulfill their side of a transaction. This is a
serious problem if one has either a single trade or many related trades with a single
counterparty, whose failure thus poses a threat, or in the event of a financial crisis
when many counterparties fail. This hazard is serious because of the large quantities
one must trade in order to make a profit on small price differences.
For example, if one purchases many risky bonds, then hedges them with CDSes,
profiting from the difference between the bond spread and the CDS premium, in a
financial crisis the bonds may default and the CDS writer/seller may itself fail, due to
the stress of the crisis, causing the arbitrageur to face steep losses.
Liquidity risk
Arbitrage trades are necessarily synthetic, leveraged trades, as they involve a
short position. If the assets used are not identical (so a price divergence makes the
trade temporarily lose money), or the margin treatment is not identical, and the trader
is accordingly required to post margin (faces a margin call), the trader may run out of
capital (if they run out of cash and cannot borrow more) and go bankrupt even though
the trades may be expected to ultimately make money. In effect, arbitrage traders
synthesize a put option on their ability to finance themselves.
Prices may diverge during a financial crisis, often termed a "flight to quality";
these are precisely the times when it is hardest for leveraged investors to raise capital
(due to overall capital constraints), and thus they will lack capital precisely when they
need it most.

ASSIGNMENT B
Q1. The following are the requirement of the type of funds and the borrowing rates
faced by three companies X, Y, Z in different markets:
Company
Requirement
LIBOR Rate
T-Bill rate
Fixed $
X
LIBOR based funds LIBOR+.75%
T-Bill+.4%
5%
Y
T-Bill Based Funds LIBOR+.5%
T-Bill+.25% 4.5%
Z
Fixed $
LIBOR+1%
T-BILL+.5% 5.5%
Three companies approach a bank individually for swap deals so that they can reduce
their cost of borrowing. You are required to structure swap transactions between three
parties keeping Bank as an intermediary so that after keeping a margin of 10 basis
points V by the Bank for each leg of swap, the rest of the gain is distributed equally
between the three parties. Also, calculate the effective cost of borrowing to the three
parties.
Answer:

T+.25

LIBOR+.70

X
FIXED@5%

Bank

T+.15%

Z
FIXED@5.1%

In the above structure the bank is getting 10 basis points on each swap leg and each
party I getting .05 or 5 basis points.

Q2. There are a variety of option combinations which traders adopt to suit their risk
return profile. Discuss the following option combinations:
(1) straddle
(2) strangle
Answer:
(1) Straddles are a good strategy to pursue if an investor believes that a stock's price
will move significantly, but is unsure as to which direction. The stock price must
move significantly if the investor is to make a profit. As shown in the diagram above,
should only a small movement in price occur in either direction, the investor will
experience a loss. As a result, a straddle is extremely risky to perform.
Additionally, on stocks that are expected to jump, the market tends to price options
at a higher premium, which ultimately reduces the expected payoff should the stock
move significantly.
(2) The strategy involves buying an out-of-the-money call and an out-of-the-money put
option. A strangle is generally less expensive than a straddle as the contracts are
purchased out of the money.
We can understand as per one example, suppose a stock currently trading at $50 a
share. To employ the strangle option strategy a trader enters into two option
positions, one call and one put. Say the call is for $55 and costs $300 ($3.00 per
option x 100 shares) and the put is for $45 and costs $285 ($2.85 per option x 100
shares). If the price of the stock stays between $45 and $55 over the life of the
option the loss to the trader will be $585 (total cost of the two option contracts).
The trader will make money if the price of the stock starts to move outside of the
range. Say that the price of the stock ends up at $35. The call option will expire
worthless and the loss will be $300 to the trader. The put option however has
gained considerable value; it is worth $715 ($1,000 less the initial option value of
$285). So the total gain the trader has made is $415.

Q3 . Option value is influenced by the option prices, which in turn depend on a number
of factors What are assumptions made by Black and Scholes option Pricing model? Also
discuss how does option premium depends on time to expiration, Interest rates, Spot
prices and strike prices.

Answer:
The Black-Scholes Option Pricing Model (OPM)
The Black-Scholes option pricing model (OPM), developed in 1973, helped give
rise to the rapid growth in options trading. This model has been programmed into many
handheld and Web-based calculators, and it is widely used by option traders.
OPM Assumptions and Results
In deriving their model to value call options, Fischer Black and Myron Scholes
made the Following assumptions.
1. The stock underlying the call option provides no dividends or other distributions
during the life of the option.
2. There are no transaction costs for buying or selling either the stock or the option.
3. The short-term, risk-free interest rate is known and is constant during the life of the
option.
4. Any purchaser of a security may borrow any fraction of the purchase price at the
short-term, risk-free interest rate.
5. Short selling is permitted, and the short seller will receive immediately the full cash
proceeds of todays price for a security sold short.
6. The call option can be exercised only on its expiration date.
7. Trading in all securities takes place continuously, and the stock price moves
randomly.

Option premium depends on time to expiration, Interest rates, Spot prices

and strike prices.
The Black-Scholes model is used to calculate a theoretical call price (ignoring
dividends paid during the life of the option) using the five key determinants of an
option's price: stock price, strike price, volatility, time to expiration, and short-term (risk
free) interest rate.
The original formula for calculating the theoretical option price (OP) is as follows:

Where:

The variables are:

S = stock price
X = strike price
t = time remaining until expiration, expressed as a percent of a year
r = current continuously compounded risk-free interest rate
v = annual volatility of stock price (the standard deviation of the short-term returns
over one year). See below for how to estimate volatility.
ln = natural logarithm
N(x) = standard normal cumulative distribution function
e = the exponential function

Case study
(a) The following options are quoted at the market:
Option
Call
Put

Expiration
1 Month
1Month

Strike Price
Rs.48.5/$
Rs.48.5/$

Premium
Rs.0.30
Rs.0.05

A trader is looking at the above options and planning to adopt long strip or long strap
strategy to make profit from the rupee-dollar exchange rate volatility.
You are required to:
I. Show the pay off profile and indicate break even points for strip and strap strategies
in a price range of Rs 47- Rs 50 for a dollar.
II. Comment on the desirability of the above two option strategies.
(b)Consider a call option on a stock with the following parameters
Stock price: Rs210
Strike Price: Rs 220
Time to expiration: 167 days
Risk free interest rate: 10 %
Variance of annual stock returns: 20%
Compute price of the call option
Answer:
Strap Position
Call Option- Strap Position
1. Strap payoff for call in the price range of Rs. 47-Rs.50 for a dollar
Profit = 2 x (Price of Underlying - Strike Price of Calls) - Net Premium Paid
=2(48.5-47)-.30 =
2.7
=2(48.5-48)-.30 =
0.7
=2(48.5-49)-.30 =
-2.7
=2(48.5-50)-.30 =
-3.3

2. There are 2 break-even points for the strap position. The breakeven points can
be calculated using the following formulae.

Upper Breakeven Point = Strike Price of Calls/Puts + (Net Premium Paid/2)

=48.5+(0.3/2) = 48.65

Lower Breakeven Point = Strike Price of Calls/Puts - Net Premium Paid

=48.5-(0.3) =
48.2

Put Option- Strap Position

1. Strap payoff for put in the price range of Rs. 47-Rs.50 for a dollar
Profit= Strike Price of Puts - Price of Underlying - Net Premium Paid
= (48.5-47)-0.05 =
1.45
= (48.5-48)-0.05 =
0.45
= ( 48.5-49)-0.05 =
-0.55
= (48.5-50)-0.05 =
-1.55
2. There are 2 break-even points for the strap position. The breakeven points can
be calculated using the following formulae.

Upper Breakeven Point = Strike Price of Calls/Puts + (Net Premium Paid/2)

=48.5+(0.05/2) = 48.525

Lower Breakeven Point = Strike Price of Calls/Puts - Net Premium Paid

=48.5-(0.05) = 48.45

Strip Position
Call Option- Strip Position
1. Strip payoff for call in the price range of Rs. 47-Rs.50 for a dollar
Profit = Price of Underlying - Strike Price of Calls - Net Premium Paid
=(48.5-47)-.30 =
1.2
=(48.5-48)-.30 =
0.2
=(48.5-49)-.30 =
-0.8
=(48.5-50)-.30 =
-1.8

2. There are 2 break-even points for the strip position. The breakeven points can be
calculated using the following formulae.

Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid

= 48.5+0.3 =
48.8

Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

=48.5-(.3/2)=
48.35

Put Option- Strip Position

1. Strip payoff for put in the price range of Rs. 47-Rs.50 for a dollar
Profit= 2 x (Strike Price of Puts - Price of Underlying) - Net Premium Paid
= 2(48.5-47)-0.05 =
2.95
= 2(48.5-48)-0.05 =
0.95
= 2( 48.5-49)-0.05 = -1.05
= 2(48.5-50)-0.05 = -3.05
2. There are 2 break-even points for the strip position. The breakeven points can
be calculated using the following formulae.

Upper Breakeven Point = Strike Price of Calls/Puts + Net Premium Paid

=48.5+.05 =

48.55

Lower Breakeven Point = Strike Price of Calls/Puts - (Net Premium Paid/2)

=48.5-(.05/2)=

48.47

Comment:
Both the options strip and strap positions are desirable till the price of underlying is 47
and 48. When price of underlying is 49 and 50 payoffs are negative, therefore they are
not desirable.

Solution (B):
The original formula for calculating the theoretical option price (OP) is as follows:

=210*0.674 -220e-.1*0.46 0.624

=10.43

Where:

d1

= [ln(210/220)+(0.10+((0.20)2 /2))0.46]/0.200.46
= -0.046+0.407= 0.453

0.453 -0.200.46
= 0.317
The variables are:
S = stock price,
X = strike price,
t=
time remaining until expiration, expressed as a percent of a year
r=
current continuously compounded risk-free interest rate
v = annual volatility of stock price (the standard deviation of the short-term returns
over one year).
ln = natural logarithm,
N(x) = standard normal cumulative distribution function
e = the exponential function

ASSIGNMENT C (MCQs)
Q1
Q2
Q3
Q4
Q5
Q6
Q7
Q8
Q9
Q10

B
A
E
B
E
A
D
F
C
A

Q11
Q12
Q13
Q14
Q15
Q16
Q17
Q18
Q19
Q20

B
B
D
A
B
A
D
D
C
D

Q21
Q22
Q23
Q24
Q25
Q26
Q27
Q28
Q29
Q30

B
A
C
D
C
D
D
D
B
B

Q31
Q32
Q33
Q34
Q35
Q36
Q37
Q38
Q39
Q40

C
D
B
B
B
D
E
A
E
C

Main references:
1.
2.
3.
4.
5.
6.

http://www.wikinvest.com/wiki/Options_-_Spread
http://www.investinganswers.com/investment-ideas/options-derivatives/profiting-options-152
http://www.wisegeek.com/what-is-corporate-restructuring.htm
http://www.caclubindia.com/articles/types-of-corporate-restructuring-5649.asp
http://www.diffen.com/difference/Forward_Contract_vs_Futures_Contract
http://www.differencebetween.net/business/finance-business-2/difference-between-futures-andforwards/
7. http://www.investopedia.com/ask/answers/06/forwardsandfutures.asp#axzz1u6zWU7Sn
8. www.gyankendra.com/index.php/finance/...arbitrage/1316-risks-.htm..