Chapter 15. Exotic Options Practice Question set contains 54 pages covering the following learning objectives:
* Define and contrast exotic derivatives and plain vanilla derivatives.
* Describe some of the factors that drive the development of exotic derivative products.
* Explain how any derivative can be converted into a zero-cost product.
* Describe how standard American options can be transformed into nonstandard American options.
* Identify and describe the characteristics and pay-off structure of the following exotic options: gap, forward start, compound, chooser, barrier, binary, lookback, Asian, exchange, and basket options.
* Describe and contrast volatility and variance swaps.
* Explain the basic premise of static option replication and how it can be applied to hedging exotic options.
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