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INTRODUCTION
UNIT 10:
Derivative Securities
The final unit in the corporate finance workbook focuses on some derivative
securities that are used in managing exposure to risk. The unit includes brief
introductions to options and swaps and a simple explanation of how they are used.
This unit is included so that you can begin to understand some complex securities
that are encountered in future courses. For a more thorough discussion of risk
management and the use of swaps and options, refer to the workbooks designed to
cover these topics. This unit is included only to provide a brief introduction to the
topics.
COURSE OBJECTIVES
When you complete this workbook, you will be able to:
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Understand the basic concepts of the three main financial statements
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Recognize the significance of the time value of money in the financial
planning process
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Identify techniques used by financial planners to evaluate, compare, and
select investment alternatives
n
Recognize the basic valuation concepts and calculations that apply to
corporate valuation
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Identify fixed income securities that may be included in an investment
portfolio and derivative securities that are used to manage risk