Question: a) While both hedging and diversification are risk management tools, explain why hedging is the preferred tool for corporate risk management. b) Describe the role

  1. a) While both hedging and diversification are risk management tools, explain why hedging is the preferred tool for corporate risk management.

  2. b) Describe the role of ex-dividend date in the payment of cash dividend.

  3. c) How are American options different from the European options? Which one of them is likely to have a higher value? Why?

  4. explain using 200 words max

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