Professor Elam

Several of you were rolling your eyes as I patiently attempted to explain a few basic option and futures (derivatives) strategies in Intermed II last semester.  Well check out the Front Page of the Friday July 6 2007 WSJ.  Commodity exchanges world wide are racing to invent new ways to gamble, er invest, er hedge risk, er, well you pick it.  The Chicago Mercantile  surpassed the NYSE in value  back in 2003.  Now the value of exchange traded derivatives is about $87 TRILLION.  And that does not count off exchange deals.  I will have my primer on derivatives finished this summer, more to come on that this fall.  And we will be posing the question in the audit class, how does one value a derivative on a balance sheet when the price changes every five seconds on the exchange?