Inancial Management Individual Work 1 Week 9
Instructional Objectives for this activity:
Describe how to use derivatives in risk management
Derivatives are frequently used to reduce the risks associated with financial and commodity markets, since their values are determined by market prices or interest rates of existing securities. Critics argue that derivatives need more regulation before they can be used comfortably, but proponents maintain that derivatives are not used to speculate, but to hedge risks. The concept of derivatives bears close attention, because derivatives can play a role in risk management.
This Mini Case asks you to take a closer look at the concepts of using derivatives in risk management through researching and answering questions pertaining to this concept for a fictional board of directors presentation.
Complete the Chapter 24 Mini Case by downloading the following handout and referring to the steps in your textbook: