3 dr – finance – original work – due tonight at 11pm est

3.1 Excellent description of forward contracts. Forward contract can be for currency exchange, supply chain, commodity prices, and more. Merna, AL-Thani  (2008, p 222) “In response to the increased foreign exchange risk, the market provided forward contracts on foreign exchange, foreign exchange futures (in1972), currency swaps (in 1981), and options on foreign exchange (in1982).” This strategy provided some risk mitigation as we expanded into the global economy.

Don't use plagiarized sources. Get Your Custom Essay on
3 dr – finance – original work – due tonight at 11pm est
Just from $13/Page
Order Essay


In addition to the existing forward contracts for metal and long-term contracts for petroleum, the onset of the increased price volatility in the late 1970s led to the appearance of futures contracts for commodities (for oil in 1978 and for metal in 1983). These were followed by commodity swaps (in 1986) and commodity options in 1986. (Merna, AL-Thani, 2008, p.222)


These same contracts as you have stated can be used for hedging to reduce risk. What specific examples can anyone present?



3.2 In many cases derivatives are more like a scale that balances the risk or reduces uncertainty. Consider a mutual fund that relies on the profits of the real-estate market and we want to protect against the down sides of the real-estate bust. We may invest in a derivative that makes profit on loan defaults. As the one fund decreases in value the other would increase. This would reduce uncertainty in your real-estate business. Both accounts may make money that is why they are in business but when one is losing the other may be gaining. Companies can further reduce risk by pooling these funds into portfolios that are similar in risk or industry to manage those risks.

This is a more likely scenario in the purchase of derivatives for the purpose of hedging, i.e. hedge funds. Derivatives serve other purposes such as future contracts to manage capacity planning for say a refinery. A manufacture or refinery is most efficient when running at 97% – 100% capacity future contracts can help with that.


Can anyone think of other uses or examples of derivatives? Can anyone provide examples of hedge funds to reduce uncertainty?


3.2b  Some of the challenges with risk mitigation are the cost above the value of the contacted price. Hedging, a way of offsetting risk, using derivatives can be challenging to calculate.


They tried to hedge their exposures to these products by taking positions in other

derivatives, which didn’t work. The hedges were hard to calculate and they didn’t calculate them right. And the difficulties were magnified by the fact that a number of players found themselves in the same situation and tried to leave at the same time. It’s known as a ‘rush to the exits’ or a ‘crowded trade.’ (Futures: News, Analysis & Strategies for Futures, Options & Derivatives Traders, 2005, p. 19)


This is a specific example of challenges with risk management and derivatives. What comments does anyone have on this example? How would you use this in risk maangment?


3.3  Most employees whether supervisors, managers, or employees have some audit responsibilities such as random audits of financial records. Annual audit points for a specific function or department. Project management generally has audit responsibilities such as governance policies that they have to meet.



Do you have responsibilities to your audit committee? Do you have audit controls set forth by your manager or company? If so what specific examples of audit requirements do you have to meet? How often do you have to meet these requirements? Does anyone else have an example they can share with the class?

Place Order
Grab 16% Discount On This Paper
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.

Professional Academic Writers

Over the years, MyEssay.Help has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keep up with the rising Academic Trends.

Affordable Prices

Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.

On-Time delivery

We pay strict attention on deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.

100% Originality

At MyEssay.help, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.

Customer Support 24/7

Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: support@myessay.help.

Try it now!

Grab 16% Discount On This Paper

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

MyEssay.help has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.


Essay Writing Services

At MyEssay.help, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.


Admission and Business Papers

Be assured that you’ll definitely get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.


Editing and Proofreading

Our skilled editing and writing team will help you restructure you paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.


Technical papers

We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as much details as possible in the place order section.

                                                                                     Place Order macbook tamir - mersin escort - envidatoken - bahis