A derivative is a financial product that derives its value based on an underlying asset, liability, or other variable (such as an interest rate, foreign currency, or commodity price). Derivatives have become very popular tools for ‘hedging’ (i.e., reducing) financial risk; they have also become an increasingly standard item on big companies’ balance sheets. Yet understanding how derivatives and hedging work, what they are used for, and how they can affect the bottom line of a business has proven to be a significant challenge for the accounting and auditing industries. This course provides an ‘accountant-friendly’ overview of financial risk management and derivative instruments. This overview focuses on the various types of risk that impact financial markets today, as well as the four major categories of derivatives commonly used to hedge these risks (i.e., forwards, futures, swaps, and options).
Introduction to Derivatives and Hedging. Forwards Futures. Swaps. Options.
CPAs, auditors, consultants, and financial and managerial professionals.
Recognize the various types of risk that impact financial markets, noting defining characteristics and examples. Identify proper financial risk management practices. Cite examples of tools used to manage financial risk, noting the basic types of derivative instruments and their usage. Cite examples of forward contracts, noting their unique characteristics. Identify appropriate hedging practices using forward contracts. Calculate the payoff from a forward contract. Calculate forward prices, noting the effects of arbitrage on forward pricing.
Michael Walker, Western CPE
Michael J. Walker, CPA, is based in New England and has decades of accounting experience in the financial services, information technology services, and construction industries. He has an extensive technical accounting background that includes hands-on experience with U.S. GAAP and International Financial Reporting Standards (IFRS). His expertise includes accounting for financial instruments, securitizations, and other banking products. He graduated from Bentley University with a BS in finance and an MS in accountancy.
Non-Member Price $200.00
Member Price $174.00