1. What do you see as some of the important advantages and disadvantages of using options to manage risk?
Use an example form the text or one from the real world that illustrates the effective, or ineffective, use of decision making using the steps listed. Discuss why they were successful or not successful. Be specific about which steps were missed, not used, ineffective, etc.
2. Assume a discount rate of 5%. Find the present value of the following: receive $10 every year for 30 years with the first payment being 10 years from now.