Podcast overview
What if we told you that you’ve been using derivatives and hedging your whole life? Agreeing to buy concert tickets for a show six months away? That's a derivative. Putting a deposit down on a new car? Also a derivative.
In this episode of our By Analogy series, we argue that nearly every forward-looking decision you make is a derivative in its purest form – a bet where the payoff depends on something else in the future. Plus, we'll show you how the logic you might use to hedge a risky dinner order is the same logic CFOs use to manage billions of dollars in risk.
Join host Nick Tricarichi and KPMG partners, Patrick Garguilo and Mahesh Narayanasami, as they break down these intimidating financial tools using simple, everyday analogies.
Earn 1 CPE by listening to this podcast episode here.
Podcast contents
- 00:00 – Introduction
- 04:25 – Forwards and futures: The “commitment” bet
- 09:55 – Options: The “maybe” bet
- 18:20 – Swaps: The “trade”
- 23:10 – Hedging
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