Fundamentals of Derivatives Markets

Robert L. McDonald is the Erwin P. Nemmers Distinguished Professor of Finance at Northwestern University’s Kellogg School of Management, where he has taught since 1984. He is co-editor of the Review of Financial Studies and has been an associate editor of the Journal of Finance, the Journal of Financial and Quantitative Analysis, Management Science, and other journals. He holds a BA in economics from the University of North Carolina at Chapel Hill and a PhD in economics from MIT.

Chapter 1: Introduction to Derivatives

Part I: Insurance, Hedging, and Simple Strategies
Chapter 2: An Introduction to Forwards and Options
Chapter 3: Insurance, Collars, and Other Strategies
Chapter 4: Introduction to Risk Management

Part II: Forwards, Futures, and Swaps
Chapter 5: Financial Forwards and Futures
Chapter 6: The Wide World of Futures Contracts
Chapter 7: Interest Rates Forwards and Futures
Chapter 8: Swaps

Part III: Options
Chapter 9: Parity and Other Option Relationships
Chapter 10: Binomial Option Pricing
Chapter 11: The Black-Scholes Formula

Part IV: Financial Engineering and Applications
Chapter 12: Financial Engineering and Security Design
Chapter 13: Corporate Applications
Chapter 14: Real Options