Question: Question 1 (3+3+3 = 9 marks) a) While both hedging and diversification are risk management tools, explain why hedging is the preferred tool for corporate

Question 1 (3+3+3 = 9 marks) a) While both hedging and

Question 1 (3+3+3 = 9 marks) 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 of ex-dividend date in the payment of cash dividend. c) How are American options different from the European options? Which one of them is likely to have a higher value? Why

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