Discussion:
1. Derivative Markets
Respond to the following: SEPARATELY. 1 PARAGRAPH EACH WITH EXAMPLE.
QUEST. 1: Analyze the complexities of the derivative markets and how the reporting of derivatives may be deceiving to investors.
QUEST. 2:Make a suggestion for improving the methods for valuing derivatives so that the reporting becomes more transparent for investors.
2. Hedging
Respond to the following:SEPARATELY. 1 PARAGRAPH EACH WITH EXAMPLE.
QUEST. 1: Create a scenario where an investor would benefit from using forward and future contracts to hedge an existing risk exposure.
QUEST. 2: Explain how an increase in interest rates may impact the scenario you created.