What is the best financial derivative for a risk averse listed public company (forwards, options, futures,...

What is the best financial derivative for a risk averse listed public company (forwards, options, futures, swap)? Why?

Expert Solution

Futures are the best for risk averse company as there is no counterparty risk because futures are traded over the exchange. Also, the returns do not get worse off dure to leverage in case of negative spot returns

jeff jeffy answered 3 years ago

Consider futures, forwards, options and swaps. Which derivative is the least risky choice for a risk...

Consider futures, forwards, options and swaps. Which derivative is the least risky choice for a risk averse public company? Why?

What are the advantages and disadvantages of forwards, futures, options and swaps in managing FX risk.

Forwards, futures and options have been used by financial institutions for many years to hedge risk...

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An analyst comments that options are always better than forwards or futures given you have the...

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Explain how forwards or futures can be used to manage risk. Provide an example of a...

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Critically evaluate alternative derivatives including forwards, futures, options and swaps available in the market to minimise...

Critically evaluate alternative derivatives including forwards, futures, options and swaps available in the market to minimise risk when paying in international currencies.

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