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FIN 406 · Unit 4 of 6

Futures, Forwards, Options and Swaps

Financial Markets, Derivatives and Risk Management

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Learning objectives

After completing this unit, you will be able to:

  • Analyze real business problems in this concentration
  • Apply the frameworks in "Futures, Forwards, Options and Swaps" to a real management decision
  • Make progress on your Concentration case analysis applied project

Why this matters

Futures, Forwards, Options and Swaps is essential to Financial Markets, Derivatives and Risk Management. Lessons build fluency with anchor-company examples, worked problems, and assessments on the unit page.

Lesson

Unit overview

Complete all 4 lessons in order. Each lesson follows the program authoring standard: conceptual prose, worked examples, practice problems, and managerial judgment prompts. Finish unit exercises and the knowledge check before marking the unit complete.

Connection to applied work

This unit feeds directly into Concentration case analysis. As you read, capture notes, examples, and data you can reuse in that deliverable. Strong students finish each unit with a draft section of their project, not just highlights.

Practice

  1. Write a one-page summary of this unit in your own words without looking at the lesson.
  2. Find a real company example (public filing, news article, or personal experience) that illustrates the main concept.
  3. Draft one paragraph recommending an action a manager should take based on this unit.
  4. Add at least three terms from this unit to your course glossary.

Knowledge check

Answer these without notes before marking the unit complete:

  1. What is the central idea of "Futures, Forwards, Options and Swaps"?
  2. What mistake do beginners most often make when applying this material?
  3. How does this unit help you complete Concentration case analysis?
  4. What is one decision you face this month where this unit applies?

Key takeaways

  • Analyze real business problems in this concentration
  • Business concepts only matter when they change a decision.
  • Your FIN 406 assessment (Financial Markets, Derivatives and Risk Management. Six units covering applied topics in this concentration.) rewards applied understanding, not memorization.

Unit assessment

Complete each section below. Score 80%+ on the quiz to finish this unit's assessment.

50% applied project30% case work20% knowledge checks

Exercises

Apply what you learned in this unit with structured practice.

ExerciseApplied practice: Futures, Forwards, Options and Swaps45 min
Complete a focused practice exercise on **Futures, Forwards, Options and Swaps**. 1. Choose a real company, product, or situation you know. 2. Apply one core framework from this unit to analyze it. 3. Write your analysis in 300–500 words with a clear recommendation. 4. Cite at least one credible source.

Deliverable

300–500 word analysis document saved to your portfolio under FIN 406.

Rubric

  • • Framework applied correctly (not just named)
  • • Specific evidence from a real example
  • • Clear recommendation with tradeoffs acknowledged
  • • Professional writing with source citation
ExerciseDrill: Futures, Forwards, Options and Swaps30 min
Work through the practice problems in the unit lesson without looking at notes. Then check your work against the lesson and write a short reflection: - What you got right - One mistake you caught - One concept to review before the next unit

Deliverable

Problem solutions + 150-word reflection in your FIN 406 workbook.

Rubric

  • • Attempted all practice items before checking answers
  • • Honest reflection on errors
  • • Identifies a specific review action

Model / spreadsheet

Build or extend a spreadsheet model tied to this unit.

ModelStructured model: Futures, Forwards, Options and Swaps60 min
Create a structured analytical model for **Futures, Forwards, Options and Swaps**. Document your assumptions, calculations, and conclusions in a format appropriate to FIN 406 (diagram, table, or written model). Connect outputs to a decision a manager would make.

Deliverable

Structured model document (2+ pages) · One-paragraph summary of key insight from the model · Screenshot or export saved to portfolio

Rubric

  • • Assumptions stated explicitly
  • • Logic is auditable (formulas or steps visible)
  • • Output answers a specific business question
  • • Sensitivity or scenario considered

Knowledge quiz

Check your understanding before marking the unit complete.

1. Crestline Holdings reports $1.20B revenue and $156M EBITDA. In Futures, Forwards, Options and Swaps, Victoria Hale's team focuses on which primary discipline?

2. Which mistake from the unit lessons is most costly at Crestline's $420M net debt scale?

3. In the Crestline worked example for Core Principles of Futures, Forwards, Options and Swaps, what is the correct managerial read?

4. Crestline Industrial Solutions generates $480M revenue. A lesson concept in Futures, Forwards, Options and Swaps applies most directly when:

5. Base net leverage at Crestline is roughly 2.69x ($420M / $156M). Which scenario test best matches unit practice problems?

6. Lesson exercises require students to complete practice problems before solutions. For Common Risks and Failure Modes in Futures, Forwards, Options and Swaps, step 1 should be:

7. Which evidence label fits historical Crestline segment margins without a forward test?

8. Ian Cho, Marcus Webb, and Elena Park disagree about Futures, Forwards, Options and Swaps. Best next step per lessons:

Next unit: Hedging and Enterprise Risk Management →