Case Study Based Assignment 2: 10 Marks

1. Shrestha Financial Advisory (SFA) has hired you as the consultant of derivative market for its clients to advise them on the issues and opportunities of derivative market. Mr. Mishra an Investor in Nepal Stock Exchange (NEPSE) is one of the old clients of SFA. He has massively invested in the stocks in NEPSE. Mr. Mishra is investing in stocks from two decades. Within this period he has experienced many ups and down in the market. Now after the initiation of Derivative and commodity exchange in Nepal, he is planning to invest on the derivative market as well. But before investing on the derivative he wants to research on the some of the questions those arising in his mind. For this he reached in the office of SFA and put his queries. He asks the following questions regarding the Derivative Market.
   1. Scope and Opportunities of Derivative Market
   2. Return and Investment cost of Derivatives
   3. Risk in Derivatives
   4. Types of Derivatives those are available for investment
   5. How can we use the derivative as risk management tools?

The Manager of SFA has invited to answer the question of Mr. Mishra. Now as a student of Financial Derivative how you will satisfy Mr. Mishra by answering his question on specific, analytical and clear tone. Prepare a Brief Presentation to answer the questions of Mr. Mishra.