What is the difference between using derivatives for hedging as opposed to speculation?
Question:
What is the difference between using derivatives for hedging as opposed to speculation?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (2 reviews)
Using derivatives for hedging and speculation involves distinct objectives and strategies Hedging Objective The primary goal of hedging is to reduce o...View the full answer
Answered By
Ashish Bhalla
I have 12 years work experience as Professor for Accounting, Finance and Business related subjects also working as Online Tutor from last 8 years with highly decentralized organizations. I had obtained a B.Com, M.Com, MBA (Finance & Marketing). My research interest areas are Banking Problem & Investment Management. I am highly articulate and effective communicator with excellent team-building and interpersonal skills; work well with individuals at all levels.
4.80+
17+ Reviews
46+ Question Solved
Related Book For
Understanding Healthcare Financial Management
ISBN: 9781567932645
5th Edition
Authors: Louis C. Gapenski
Question Posted:
Students also viewed these Business questions
-
1. What is it that a bank wishes to protect from adverse movements in interest rates? 2. What is the goal of hedging in banking? 3. What is the concept of gap management? 4. How is a bank's duration...
-
What is the difference between making a bad business decision associated with derivatives and engaging in unethical conduct using derivatives? The 20082009 global recession was caused in part by a...
-
answer all questions as instructed below. attend all questions. 4 Computer Vision (a) Explain why such a tiny number of 2D Gabor wavelets as shown in this sequence are so efficient at representing...
-
Various streptococci and lactobacilli were traditionally grouped together as lactic acid bacteria because of their characteristic fermentation. Most of them were found to have a DNA Guanine plus...
-
Which four divisions constitute indirect and expense work?
-
Duke Energy manufactures and distributes electricity to customers in the United States and Latin America. Duke Energy acquired Cinergy Corporation in 2005, which had generating facilities and energy...
-
Explain why there must be a mistake in each of the following statements: (a) The probability that a mineral sample will contain silver is 0.38 and the probability that it will not contain silver is...
-
1. What recommendations can you offer Tanya to be more effective in dealing with Marks tardiness problem? 2. To what extent do you think Tanya should be more tolerant with respect to Marks problem of...
-
The following data were gathered to use in reconciling the bank account of Bradford Company: Balance per bank $ 18,050 Balance per company records 10,040 Bank service charges 50 Deposit in transit...
-
Why are derivatives better than direct claims for speculation?
-
What is a natural hedge? Give some examples of natural hedges.
-
The purpose of producing 99 Mo (usually by neutron activation of natural molybdenum, as in the preceding problem) is to produce 99m Tc. Using the rules, verify that the - decay of 99 Mo produces 99m...
-
ORGANIZATIONAL CULTURE - CHURNING OUT A NEW CULTURE QUESTIONS: Summarize the meaning of organizational culture. Using specific examples from the Manager's Hot Seat video titled 'Organizational...
-
discuss three important concepts applicable to your work experience, profession, and/or career plans for the future. Describe how each applies. What part of the course (background materials,...
-
what makes a manager effective? Think about an effective manager(s) you have worked for, heard, or read about. What made him/her great? Create a list of characteristics or behaviors that distinguish...
-
The change effort proposed for the Cuyahoga County Clerk of Courts is implementing a paperless filing system. Describes how failing to implement this needed change could or will impact the...
-
What changes would you make to increase your productivity and be more efficient at the same time? What can you do to reduce waste and increase satisfaction? What barriers do you anticipate may...
-
Hardesty Company uses budgets in controlling costs. The May 2012 budget report for the company's Packaging Department is as follows. The monthly budget amounts in the report were based on an expected...
-
Assessing simultaneous changes in CVP relationships Braun Corporation sells hammocks; variable costs are $75 each, and the hammocks are sold for $125 each. Braun incurs $240,000 of fixed operating...
-
Why is EVA a better measure of financial performance than are accounting measures such as earnings per share and return on equity?
-
What is EVA, and how is it measured?
-
Explain how inflation effects created problems in the Bayside illustration.
-
Riverside Incorporated makes one model of wooden canoe. Partial information for it follows: Number of Canoes Produced and Sold 520 670 820 Total costs Variable costs Fixed costs $ 72,800 148,500 ? ?...
-
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles. The snowmobiles were delivered on January 1, 2024, and Arctic received a note from Seneca indicating that Seneca will pay Arctic $31,800...
-
How did Ptolemys atlas contribute to a greater understanding of world geography, and how did it produce confusion?
Study smarter with the SolutionInn App