1.What is a forward contract? How is a forward contract used to manage risk? Under what circumstances is this appropriately used?
1A.Forward contracts lock in the exchange rate of a product or service. The supplier will markup the value of the contract for what they believe the exchange rate may be in the future and the contractor wants to set a value that is acceptable to their expected costs. In this the contractor can reduce uncertainty. The risk that remains is the actual cost of the exchange rate at the time of exchange compared to the value of the contract.
Does one side have more risk than the other? If so why? If not, why not? Do both sides get what they want; is this a win-win scenario?
2. What is a derivative? How are derivatives used in risk management? What are some challenges used in mitigating risk with derivatives?
3.What is an audit committee? What is the function of an audit committee? How does an audit committee in your organization insure compliance with Securities and Exchange Commission regulations?
4.Write and present a summary of how this week’s readings and activities (Forward Contracts, Derivative, Audit Committee) have affected your thought process regarding the week’s course objectives. Be sure to include the DQ’s, team discussions and assignments, your individual assignments, the text reading materials, and the electronic reserve articles in the discussion. The summary should be very detail and created in a positive manner.
B1.What are strategic objectives? What is the purpose of strategic objectives? What makes an effective strategic objective? What are examples of strategic objectives for you organization or one with which you are familiar?
B2.What is the difference among strategic, long-term, and short-term objectives? What is the relationship between objectives and goals? What are examples of this relationship?